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UNIVERSITY  OF  ILLINOIS  STUDIES 

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Vol.  XIII  June,  1925  No.  2 


THE  IRON   AND   STEEL  INDUSTRY 
OF  THE  CALUMET  DISTRICT 

A  STUDY  IN  ECONOMIC  GEOGRAPHY 


BY 
JOHN  B.  APPLETON,  Ph.D. 


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UNIVERSITY  OF  ILLINOIS  STUDIES 

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Vol.  XIII  June,  1925  No.  2 


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/ 


Published  by  the  Unu'ersity  of  Illinois 

Under  the  Auspices  of  the  Graduate  School 

Urbana,  Illinois 


Copyright,  1927 
By  the  University  of  Illinois 


THE  IRON  AND  STEEL  INDUSTRY 
OF  THE  CALUMET  DISTRICT 

A  STUDY  IN  ECONOMIC  GEOGRAPHY 


By 
John  B.  Appleton,  Ph.D. 

Assistant  Professor  of  Geography 
University  of  Illinois 


PUBLISHED  BY  THE  UNIVERSITY  OF  ILLINOIS 
URBANA 


yi^./2.   PREFACE  ^ 

The  data  on  which  the  conclusions  reached  in  this  study  are 
based  have  been  collected  in  three  ways: 

(i)  by  field  observation  of  conditions  as  they  exist  at  the 
present  time, 

(2)  by  personal  conferences  with  executive  officials  of 
the  various  iron  and  steel  plants  and  associated  industries, 

(3)  by  library  investigation  of  the  available  data  in  Chi- 
cago and  at  Washington,  D.  C. 

Statistical  material,  even  including  that  available  In  the  evi- 
dence which  was  given  before  the  Federal  Trade  Commission 
during  the  "Pittsburgh  Plus"  inquiry,  is  incomplete  and  not  al- 
together reliable.  Nevertheless,  it  has  been  possible  to  supplement 
and  to  check  the  published  material  through  conference  and  field 
observation  sufficiently  to  permit  an  evaluation  of  the  present 
importance  of  the  area  from  the  standpoint  of  production.  Sug- 
gestions as  to  probable  future  developments  are  based  on  con- 
clusions which  have  been  reached  during  the  course  of  the  investi- 
gation. 

The  author  is  indebted  to  the  officials  of  the  various  iron  and 
steel  companies  for  their  courtesy  and  co-operation.  They  have 
supplied  much  very  useful  information,  and  have  made  many 
helpful  suggestions. 

The  United  States  Army  Engineer  of  the  Chicago  District, 
the  Indiana  Harbor  Belt  Railroad  Company,  the  Elgin  Joliet  and 
Eastern  Railroad  Company,  and  the  Secretary  of  the  Lake  Superior 
Iron  Ore  Association,  have  supplied  a  number  of  useful  maps. 
V  The  Editors  of  various  trade  journals,  including  Iron  Age^ 

^  Coal  Age^  The  Iron  Trade  Review,  and  Motorship,  have  loaned  a 
number  of  useful  photographs  and  supplied  references  to  pub- 
lished material. 


The  Wellman-Seaver-Morgan  Company,  the  Columbus 
Mining  Company,  and  the  Illinois  Steel  Company,  have  supplied 
a  large  number  of  photographs. 

The  Chambers  of  Commerce  at  Chicago,  Gary,  Hibbing, 
Hammond,  and  Escanaba,  have  been  very  helpful. 

The  writer  wishes  to  thank  Professor  Harlan  H.  Barrows, 
and  Professor  Wellington  D.  Jones  of  the  University  of  Chicago, 
for  their  helpful  suggestions,  which  have  enabled  him  to  organize 
and  carry  through  the  investigation,  and  to  present  his  conclusions 
In  the  following  study. 

John  B.  Appleton 

University  of  Illinois 
December,  1925. 


TABLE  OF  CONTENTS 

PAGE 

Introduction ii 

PART  I 

THE  PRODUCTION  OF  IRON  AND  STEEL  IN  THE 
CALUMET  DISTRICT 

Chapter  I.  The  Magnitude  and  Character  of  the  Industry  ...  19 
The  importance  of  the  industry  in  the  Calumet  District,  19.  The 
status  of  Calumet  production  in  the  Northern  Interior  and  in 
the  United  States,  19.  The  decline  of  the  industry  of  Chicago 
accompanied  its  expansion  in  the  Calumet  District,  27.  The 
distribution  and  location  of  iron  and  steel  plants  within  the 
Calumet  District,  29.  Modern  equipment  and  methods  reduce 
costs  of  production  below  those  of  other  districts,  33.  The 
dominant  feature  of  the  industry  is  large  scale  production,  33. 
Products,  34. 

Chapter  II.  The  Location  of  the  Calumet  District  with  Refer- 
ence TO  Sources  of  Raw  Materials 41 

Iron  Ore — Consumption  and  sources,  41.  The  grading  and  classi- 
fication of  ores,  42.  Mining  operations,  45.  Ore  handling  at 
Upper  Lake  Ports,  47.  Reserves  of  ore,  48.  Lake  Transpor- 
tation facilities,  49.  Facilities  at  Calumet  ports  for  the  recep- 
tion of  ore,  53. 

Cca/ — Sources,  Types  of  coal.  Reserves  61.  Mining  operations,  63. 
Transportation  and  cost  of  assembling,  64.  Fuel  consump- 
tion, 66.  Conservation  practices,  74.  Utilization  of  Blast  Fur- 
nace gases,  74.  Use  of  Open  Hearth  gases,  76.  Use  of  By- 
product oven  gases,  76.      Other  practices  for  fuel  economy,  77. 

Limestofie — Consumption  and  sources,  77.  Types  of  limestone 
used,  78.  Quarrying  operations  in  Michigan,  78.  Conditions 
at  Kelleys  Island  and  Marblehead,  79.  Non-use  of  Illinois  and 
Indiana  supplies,  80. 

Chapter   III.  Local   Conditions  in  the  Calumet  District  Favorable 

for   Iron  and   Steel  Production 81 

The  Nature  0/  the  Industry  Requires  Large  Areas  oj  Flat  Land — The  lay- 
out of  the  plant  in  relation  to  the  site,  81.  The  superiority  of 
lake-shore  locations,  83.  The  disadvantages  of  lake-shore 
locations,  84.  The  necessity  of  large  storage  space  for  winter 
supplies,  85.  The  problem  of  slag  disposal,  86,  The  disposal  of 
flue  dust,  89. 


Adequate  Supplies  of  Water  are  Available  to  All  Mills — The  necessity  for 
large  supplies  of  water,  89.  Consumption,  90.  Water  easily 
obtained  from  either  Lake  Michigan  or  the  Calumet  River,  91. 

Chapter  IV.  Labor  Conditions 92 

Labor  Supply — Advantages  of  location  near  Chicago,  92.  Types  of 
labor   employed,   93. 

Industrial  Expansion  has  Necessitated  Urban  Development — Western 
sections,  93.  Eastern  sections,  94.  Co-operation  of  the  indus- 
trialists in  urbanization — Gary,  95.  Present  trend  of  urban 
expansion,   97. 

Suburban  Railroad  Facilities,  98. 

PART  II 
MARKETING  ASPECTS 

Chapter  V.  The  Calumet  District  in  Relation  to  Its  Markets     .   loi 

The  Natural  Markets  of  the  Calumet  District— Chicago,  loi.  Char- 
acter of  Market,  loi.  Beyond  Chicago,  106.  Character  of  Mar- 
ket, 108. 

Transportation  Facilities  in  the  Calumet  District  in  Relation  to  Market- 
ing— Railroads,  no.  Chicago  the  center  of  extensive  railroad 
net.  III.  Belt  lines — their  purpose,  location  and  function,  112. 
Trucking,  115.       The  Great  Lakes  waterway,  115. 

Ai-tijicial  Restriction  of  the  Markets  of  the  Calumet  District,  116. 

The  Probable  Extent  and  Location  of  Markets  with  the  Removal  of 
'^Pittsburgh  Plus"   119 

Selected  Bibliography 121 


LIST  OF  FIGURES 

PAGE 

1.  Map  Showing  Iron  and  Steel  Plants  and  the  Railroad  Net  in  the 

Calumet  District 29 

2.  Map  Showing  Sources  and  Movement  of  Iron  Ore,  Coal,  and  Lime- 

stone     41 

3.  Map  Showing  Metropolitan  Chicago  and  the  Elgin  Joliet  and  Eastern 

Railroad  (Outer  Belt) 102 

LIST  OF  PLATES 

1.  Mining  Operations  at  North  Forty,  Hibbing,  Minnesota 123 

2.  A  Modern  Lake  Freighter  Alongside  the  Ore  Dock  at  Escanaba  .     .123 

3.  Loading  Ore  at  Duluth  Ore  Docks 125 

4.  Mouth  of  the  Calumet  River  and  Illinois  Steel  Plant 125 

5.  Gary  Harbor  and  Ore  Docks 127 

6.  Unloading  Ore — a  Clam  Shell  in  the  Hold  of  a  Lake  Freighter   .     .     .  127 

7.  Unloading  Ore  at  Gary 129 

8.  Coal  Mining  at  Christopher,  Eastern  Kentucky 129 

9.  Coal  Dock  of  the  Wisconsin  Steel  Company,  Calumet  River    .     .     .  131 

10.  Limestone  Quarry  at  Alpena,  Michigan 131 

11.  Ore  Piles,  Iroquois  Plant,  South  Chicago 133 

LIST  OF  TABLES 

I.  Receipts  of  Iron  Ore  at  Calumet  Ports,  1901-1925 20 

II.  Total  Shipments  of  Lake  Superior  Ore  and  Receipts  at  Calumet 

Ports,  1 901-1925        24 

in.  Iron  and  Steel  Production  for  Selected  States 25 

IV.  Relative  Mill  Cost  of  Manufacturing  Structural  Shapes,  Plates, 
Merchant  Bars,  Black  Sheets,  in  Pittsburgh,  Chicago,  Duluth, 

Birmingham,  1920 35 

V.   Kinds  of  Steel  Produced  in  Illinois,  Indiana,  and  U.  S.  A.,  1880-1924  38 

VI.  By-product  Coke  Capacity  of  the  Calumet  District,  1924  ....  71 

VII.  Manufactures  of  Chicago,  1919 102 

VIII.  Estimated  Consumption  of  Steel,  1924 104 

IX.  Distribution  of  Steel  Among  the  Chief  Consuming  Groups,  1921, 

1922,  1923,  1924        no 


INTRODUCTION 

The  Calumet  Industrial  District  stretches  along  the  south- 
western and  southern  shore  of  Lake  Michigan  from  the  western 
limits  of  South  Chicago  to  the  eastern  limits  of  Gary.  It  con- 
stitutes a  part  of  Metropolitan  Chicago,  and  although  part  of  it 
lies  in  Illinois  and  part  in  Indiana,  it  is  an  economic  unit. 

The  district  is  important  chiefly  because  of  its  manufacturing, 
which  centers  around  iron  and  steel.  The  character  of  the  in- 
dustrial development  is  obvious  at  a  glance  as  one  traverses  the 
district,  for  across  wide  tracts  of  unused  land  the  large  mills,  with 
their  many  smoking  stacks,  stand  out  in  striking  relief.  A  closer 
view  shows  large  lake  freighters  discharging  ore  at  the  docks,  on 
which  lie  great  piles  of  ore,  coal,  and  limestone,  extensive  and 
elaborate  machinery  for  transferring  this  huge  bulk  of  materials, 
trainloads  of  coal,  coke  plants,  and  noisy  mills  much  alike  exter- 
nally, but  within,  fitted  to  the  specialized  needs  of  this  industry  of 
many  ramifications. 

Prior  to  the  founding  of  the  iron  and  steel  plants,  little  or  no 
industrial,  residential,  or  even  agricultural  development  had  taken 
place  in  the  district  in  spite  of  its  proximity  to  Chicago.  The 
marshy  and  sandy  character  of  the  land  had  left  it  largely  waste. 
Consequently,  when  the  steel  interests  recognized  the  value  of 
the  lake  shore  and  the  banks  of  the  Calumet  River  for  large 
scale  industry,  they  were  able  to  acquire  all  the  land  they  needed 
in  large  blocks,  because  no  subdivision  for  residential  purposes 
had  taken  place.  Subsequent  to  the  development  of  industrial 
activities  and  consequent  upon  them,  parts  of  the  district  have 
been  subdivided  and  built  up  as  residence  and  business  districts. 
From  the  standpoint  of  the  industries  requiring  large  ground 
space,  It  is  fortunate  that  subdivision  and  residential  development 
did  not  precede  them. 

One  of  the  chief  requirements  of  the  iron  and  steel  industry 
was  facilities  for  receiving  ore  by  boat.  There  were  no  natural 
harbors  on  the  lake  front,  and  the  mouth  of  the  Calumet  River 
required  extensive  improvement  before  it  was  accessible  even  to 
small  lake  boats.  The  low  shore,  the  shallow  water  fronting  it, 
and  the  character  of  the  materials  underlying  both  the  land  and 
the  lake,  unconsolidated  sand  and  clay  till,  made  the  digging  of 

II 


12  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [192 

artificial  harbors  and  canals,  and  the  building  of  breakwaters, 
relatively  easy  and  inexpensive. 

The  district,  located  at  the  southern  extremity  of  Lake 
Michigan,  lies  athwart  the  route  inevitably  followed  by  a  number 
of  railroads  to  Chicago  from  the  east  and  southeast.  The  indus- 
trialists, once  their  attention  was  drawn  to  the  district,  recog- 
nized the  value  of  its  existing  transportation  facilities  by  rail,  and 
its  potential  facilities  by  lake,  for  the  reception  of  coal,  ore,  and 
limestone,  and  for  the  distribution  of  iron  and  steel  or  other 
manufactured  products. 

Around  the  production  and  fabrication  of  iron  and  steel  almost 
the  entire  economic  structure  of  the  district  has  been  built.  The 
smelting  of  iron  ore,  the  conversion  of  the  molten  iron  into  steel, 
and  the  rolling  of  the  steel  into  rails,  bars,  shapes,  billets,  etc., 
are  carried  out,  in  most  cases,  in  the  same  plant,  the  products 
varying  in  different  plants  according  to  the  degree  of  specializa- 
tion carried  on,  and  the  market  served. 

The  chief  iron  and  steel  producing  plants,  classified  according 
to  location,  are: 

(a)  Lake-side  locations:    (west  to  east) 

I.  Illinois  Steel  Company,  South  Chicago 
1.  Youngstown  Sheet  and  Tube  Company,  South  Chicago 
and  Indiana  Harbor 

3.  Inland  Steel  Company,  Indiana  Harbor 

4.  Indiana  Steel  Company,  Gary 

5.  National  Tube  Company,  Gary^ 

(b)  Calumet  River  locations:    (north  to  south) 

1.  Federal  Furnace  Company,  South  Chicago 

2.  Wisconsin  Steel  Company,  South  Chicago 

3.  Interstate  Steel  Company,  South  Chicago 

(c)  Indiana  Harbor  Canal  location: 

I.  Jones  and  Laughlin  Steel  Company,  Hammond^ 
By-product  coke  plants,  which  play  an  important  part  in  the 

industry  and  in  the  operation  of  the  furnaces,  are,  in  most  cases, 

located  contiguous  to  the  iron  and  steel  plants. 

The  factories  concerned  with  the  fabrication  of  iron  and  steel 

are  scattered  throughout  the  district,  but  in  most  cases  they  are 

^Approaching  completion. 

^Preparations  for  construction  in  progress. 


193]  INTRODUCTION  13 

located  strategically  with  reference  to  sources  of  raw  material 
and  to  railroad  transportation.  Their  products  are  very  diversified 
and  comprise  all  types  of  manufactured  iron  and  steel  goods,  espe- 
cially those  chiefly  in  demand  in  the  territory  served  by  Chicago, 
such  as  machinery,  agricultural  implements,  cars,  locomotives, 
wire  products,  and  structural  steel.  Like  the  blast  furnaces  and 
steel  mills,  these  plants  require  large  sites.  This  is  particularly 
true  of  those  plants  concerned  with  railroad  or  structural  equip- 
ment, such  as  the  American  Tank  Car  Company  and  the  American 
Bridge  Company.  Consequently,  the  Calumet  District  is  partic- 
ularly suitable  for  their  location  on  account  of  the  large  amount 
of  available  land,  as  well  as  because  of  supplies  of  raw  material 
produced  within  the  district,  abundant  transportation  facilities, 
and  proximity  to  Chicago  and  the  markets  of  the  Northern  In- 
terior. 

Urban  centers  have  grown  up  around  the  several  groups  of 
iron  and  steel  plants.  In  most  cases  these  urban  areas  are  separated 
by  wide  stretches  of  vacant  land.  Only  in  the  western  part  of  the 
district  is  there  an  almost  continuous  built-up  area.  This  extends 
from  South  Chicago  to  Blue  Island,  and  is  concerned  chiefly  with 
the  fabricating  industries,  which  occupy  that  section  of  the  dis- 
trict. 

Certain  industries,  other  than  those  concerned  with  the 
manufacture  and  fabrication  of  iron  and  steel,  have  been  estab- 
lished in  the  Calumet  District  and  have  increased  its  industrial 
importance.  The  Bufiington  Portland  Cement  plant  is  the  largest 
of  its  kind  in  the  country.  It  is  related  closely  to  blast  furnace 
operations,  since  slag  is  one  of  the  more  important  of  its  raw 
materials.  The  oil-refining  industry,  carried  on  by  the  Standard 
and  Sinclair  Companies  at  Whiting,  is  very  large.  It  functions 
under  very  favorable  conditions.  Abundant  land,  just  beyond  the 
congested  areas,  is  available,  the  great  Chicago  market  is  at  hand, 
and  excellent  railroad  facilities  give  access  to  the  rich  markets  of 
the  Northern  Interior.  The  Grasselli  Chemical  Company  located 
its  immense  plant  at  Hammond  for  reasons  similar  to  those  that 
attracted  the  oil  refineries  to  Whiting. 

The  Calumet  River  has  superseded  the  Chicago  River  as  the 
chief  collecting  and  forwarding  point  for  the  grain  movement  from 
the  Northern  Interior  to  the  East.   Rail  and  water  transportation 


14  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [194 

are  excellent,  and  there  are  not  the  handicaps  to  the  business  that 
are  inevitable  in  the  heart  of  a  great  city.^ 

The  purpose  of  this  study  is  to  explain  the  relation  of  the 
iron  and  steel  industry  of  the  Calumet  District  to  natural  environ- 
mental conditions. 

The  rapid  development  which  has  taken  place  in  recent  years 
is  indicative  of  highly  favorable  conditions  for  the  successful 
operation  of  iron  and  steel  mills  on  a  very  large  scale.  Adequate 
areas  of  flat  land,  provided  with  transportation  facilities  which 
permit  the  assembling  of  raw  materials  and  the  marketing  of 
finished  products  over  a  wide  area  with  relative  ease,  and  an 
abundance  of  suitable  water,  in  addition  to  adequate  labor  supplies, 
all  have  proved  great  assets.  Although  the  sources  of  ore  are  dis- 
tant, this  material  can  be  obtained  relatively  cheaply  owing  to  lake 
transportation  facilities.  Coal,  too,  is  distant,  and  comes  part  of 
the  way  or  all  of  the  way  by  rail.  This  is  the  chief  handicap  under 
which  the  Calumet  District  labors  in  competition  with  the  Pitts- 
burgh Steel  District,  but  the  later  development  of  the  former  has 
given  it  a  more  modern  equipment,  permitting  the  adoption  of  the 
latest  practices  for  reducing  costs  of  production,  and  thus  largely, 
if  not  entirely,  offsetting  the  handicap  with  reference  to  coal. 

Within  a  few  years  the  Calumet  District  has  risen  to  third 
place  in  the  United  States  as  a  producer  of  iron  and  steel.  Probably 
no  steel  producing  district  is  more  advantageously  located  with 
reference  to  a  large  and  growing  market.  This  fact  added  to  the 
natural  advantages  of  the  district,  makes  the  cost  of  production 
lower  there  than  elsewhere  in  the  country.  Owing  to  artificial 
regulations  created  by  the  "Pittsburgh  Plus"  system  of  basing 
prices,  the  natural  markets  for  the  Calumet  products  have  not 
been  developed  solely  for  the  advantage  of  that  district.  The 
elimination  of  these  restrictions  should  cause  a  big  increase  of 
production  in  the  Calumet  District  at  the  expense  of  the  Pitts- 
burgh District.  The  general  opinion,  as  expressed  by  the  press 
and  officials  throughout  the  Calumet  District,  points  to  great 
industrial  expansion  there  in  the  next  few  years.  South  Chicago, 
Gary,  Hammond,  Indiana  Harbor,  and  other  cities,  all  anticipate 
a  very  rapid  growth,  owing  to  their  strategic  location  with  reference 

'For  a  full  discussion  of  the  grain  trade,  see  Hartshorne,  R.,  The  Lake 
Traffic  oj  Chicago.    (Doctor's  Dissertation  at  the  University  of  Chicago,  1924). 


195]  INTRODUCTION  I5 

to  the  western  and  northwestern  markets.  Present  indications 
point  to  the  influx  of  many  Pittsburgh  and  Youngstown  fabricat- 
ing companies  into  the  Calumet  District  and  therefore  to  an  in- 
creased local  demand  for  iron  and  steel. 

The  conclusions  reached  in  this  investigation  may  be  sum- 
marized as  follows: 

1.  The  manufacture  of  iron  and  steel  in  the  Calumet  District 
represents  an  effective  adjustment  to  local  and  regional  equip- 
ment, (i)  An  abundance  of  vacant,  flat  land,  available  to  the 
industry  in  large  blocks  at  relatively  low  prices;  a  lake  front  which, 
though  devoid  of  good  natural  harbors,  could  be  readily  improved 
for  commerce  because  of  the  character  of  the  terrane,  and  along 
which  new  land  could  be  built  with  slag  in  the  shallow  off-shore 
waters;  the  ease  and  low  cost  with  which  the  enormous  volume  of 
pure  water  required  by  the  industry  could  be  provided;  and 
proximity  to  Chicago,  with  its  abundant  supply  of  labor  and  its 
commercial  facilities,  have  proved  to  be  the  chief  advantages  of  the 
local  equipment.  (2)  The  ability  both  to  assemble  in  the  district 
the  requisite  raw  materials  of  the  industry  at  reasonable  costs 
and  to  distribute  widely  its  manufactured  products,  together  with 
those  of  the  dependent  fabricating  plants,  is  the  outstanding 
regional  advantage.  Ore,  limestone,  and  coal  (in  part)  are  brought 
at  low  rates  in  vessels  which  themselves  represent  an  adjustment 
to  conditions  of  the  Great  Lakes,  and  are  handled  at  the  terminals 
by  machinery  designed  to  permit  the  accumulation  of  the  maxi- 
mum tonnage  in  the  season  of  navigation.  Unsurpassed  rail 
facilities  are  insured  by  the  many  railroads  which  converge  upon 
Chicago. 

2.  Within  the  district,  the  urban  centers  and  the  fabricating 
plants  are  grouped  near  the  iron  and  steel  mills.  The  latter  adjoin 
the  waterways,  the  Lake  or  the  lower  Calumet  River,  upon  which 
they  are  so  dependent.  Present  indications  point  to  urban  develop- 
ment in  the  pleasant  morainic  lands  along  the  southern  margin  of 
the  district,  leaving  the  unattractive  lands  which  are  still  vacant 
on  the  lacustrine  plain  for  future  industrial  development. 

3.  The  significant  fact  that  the  cost  of  producing  iron  and  steel 
in  the  Calumet  District  is  lower  than  anywhere  else  in  the  country 
is  attributable  to  the  advantages  of  the  district  already  noted, 
to  the  very  modern  character  of  its  plants,  and  to  the  highly 
scientific  methods  employed  there. 


l6  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [196 

4.  The  "Pittsburgh  Plus"  system  of  basing  prices  restricted 
production  in  the  Calumet  District,  since  because  of  it,  eastern 
producers  shared  on  equal  terms  the  natural  market  of  the  Calumet 
producers.  Its  recent  elimination  should  permit  the  free  operation 
of  geographic  and  economic  factors.  It  seems  highly  probable, 
as  a  result,  that  the  Calumet  District  will  become  the  chief  iron 
and  steel-producing  center  in  the  country. 


PART  I 

THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  THE  CALUMET  DISTRICT 


CHAPTER  I 

THE  MAGNITUDE  AND  CHARACTER 
OF  THE  INDUSTRY 

Approximately  21  per  cent  of  the  output  of  iron  and  steel  in  the 
United  States  is  produced  in  the  Calumet  District.  This  produc- 
tive capacity  has  been  achieved  in  a  remarkably  short  time,  and 
if  the  rate  of  increase  from  1908  to  1923  is  maintained,  the  ultimate 
supremacy  of  this  district  over  the  Pittsburgh  District  is  assured 
in  the  not  distant  future.^ 

The  Local  Significaxce  of  the  Industry 

The  production  of  iron  and  steel  is  the  most  significant  in- 
dustry in  the  Calumet  District,  not  by  reason  of  the  value  of  its 
products,  nor  because  of  numbers  of  men  employed,  but  because  it 
forms  the  basis  of  the  great  fabricating  industries  which  have 
grown  up  around  the  iron  and  steel  mills.  A  survey  of  the  dis- 
trict shows  how  closely  most  of  its  economic  development  is  re- 
lated to  the  different  phases  of  the  iron  and  steel  industries  which 
form  the  chief  outlet  for  labor  in  almost  every  community  in  the 
district.  Gary  and  Indiana  Harbor  are  exclusively  "steel"  towns. 
They  were  founded  by  the  steel  interests  to  serve  the  steel  in- 
dustries, and  few  other  manufacturing  activities  have  been  started 
in  them.  A  glance  through  the  lists  of  industries  carried  on  in  the 
various  cities  in  the  Calumet  District  shows  the  preponderance  of 
those  whose  basic  raw  material  is  some  form  of  iron  or  steel. 

The  Status  of  the  Calumet  District  with  Reference  to 
THE  Northern  Interior  and  the  United  States 

The  Calumet  District  is  the  chief  iron  and  steel  producing 
center  in  the  Northern  Interior.  The  concentration  of  the  in- 
dustry can  be  shown  more  easily  through  the  medium  of  the  blast 
furnaces  than  by  steel  mills  since  it  is  less  difficult  to  trace  the 
movement  of  iron  ore  than  that  of  pig  iron.  The  size  of  the  oper- 
ation, the  high  cost  of  building  blast  furnaces,  and  the  necessity 
for  large  scale  production,  exclude  the  erection  of  small  furnaces. 

^Federal  Trade  Commission,  Docket  760,  p.  133. 

19 


20 


IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT 


[200 


Out  of  a  total  of  forty-eight  furnaces  in  the  Northern  Interior, 
thirty-seven  are  concentrated  in  the  Calumet  District.^ 

This  concentration  is  further  shown  by  the  consumption  of 
iron  ore.  In  1922,  the  Calumet  District  received  over  8,000,000 
tons,  out  of  a  total  importation  by  Illinois  and  Indiana  of  a  little 
more  than  9,000,000  tons. 

The  map  (Fig.  2)  showing  the  movement  and  distribution  of 
Lake  Superior  Iron  Ore  indicates  the  tonnage  received  at  the 
various  consuming  centers  in  1924.  The  significance  of  the  Calumet 
District  in  contrast  with  other  smelting  centers  in  the  Northern 
Interior  is  clearly  shown.  Receipts  of  ore  by  Calumet  ports  are 
shown  in  Table  I.  All  of  these  receipts  are  utilized  in  the  immediate 

TABLE  I* 
Receipts  of  Iron  Ore  at  Calumet  Ports,  1901-1925 

(Millions  of  Tons) 


South 
Chicago 

Gary 

Indiana 
Harbor 

Total 

igoi 

2.  c 

•7 
1-9 
1.8 

1-3 
2. 1 
2.4 
1.6 
2.4 
2.7 
3-9 
3-8 

3-6 

2-3 

2.9 
4.0 
31 
4-9 

.05 

•15 

•15 

•13 

•3 

•35 

•5 

•45 

•7 

•7 

.8 

•9 
^•4 
I.  I 
1.2 

.8 
1. 1 
1.6 
1^5 
1^9 

2^5 
3^4 

2.6 

IQ02 

3 
3 

2 

3 
4 
4 
3 
4 
5 
3 
5 
5 
3 
4 
7 
7 
6 

t 

2 

5 
6 

4 
6 

4 
I 

6 

0 

2 

5 

2 

4 
0 

9 

I 

9 

7 
5 
0 

I 
7 

I 

0 
9 

5 
4 

iqo^ 

iqoA 

IOO< 

3-0 
4.25 

IQ06 

IQ07 

4.65 

IQO8 

3-85 

6^43 

7-1 

5-55 

8.1 

1909 

1910 

iqll 

Iql2 

I913 

iqiA 

8.45 
6.2 

iql  C 

7.8 

lqi6 

II. 0 

IQI7 

II. 8 

1918 

"•3 

8.3 

IQIQ 

IQ20 

II.  I 

IQ2I 

5.7 

1922 

IQ2'^ 

9.0 
12.5 

1024 

9- 1 

1925 

13.2 

*Based  on  data  supplied 
of  Lake  Superior,  by  Crowell 


by  the  Lake  Superior  Iron  Ore  Association,  1925,  and  Iron  Ores 
and  Murray. 


''The  48  furnaces  are  distributed  as  follows: 

Illinois  26     (Calumet  District  21) 

Indiana  16     (Calumet  District  16) 

Wisconsin     5 

Missouri     i 
Annual  Report,  Lake  Superior  Iron  Ore  Association,  1923  (Fig.  2). 


201  ]  THE  MAGNITUDE  AND  CHARACTER  OF  THE  INDUSTRY  21 

vicinity,  with  the  exception  of  the  relatively  small  amounts  sent 
to  the  four  furnaces  at  Joliet,  which  are  supplied  from  South 
Chicago.  The  rapid  upward  trend,  especially  since  1908,  when  the 
Gary  mills  began  to  function,  is  very  noticeable  in  spite  of  the  wide 
fluctuations  from  year  to  year.  The  year  1925  was  a  record  for  the 
Calumet  District,  and  the  impending  completion  of  the  National 
Tube  Mills  at  Gary  should  lead  to  a  further  increase  in  ore  receipts. 

Since  the  bulk  of  the  iron  produced  at  the  present  time  is 
converted  into  steel  in  its  molten  state,  most  of  the  blast  furnace 
establishments  form  a  part  of  the  steel  mills,  in  order  that  the  iron 
may  be  utilized  as  soon  as  it  leaves  the  blast  furnace.  In  this  way 
the  expense  of  re-heating  is  avoided,  and  the  cost  of  producing 
steel  materially  lowered.  In  Indiana,  95%  of  the  iron  is  delivered 
in  a  molten  state  to  the  steel  mills,  in  Illinois,  76%.^  The  difference 
can  be  explained  by  the  fact  that  two  large  blast  furnace  establish- 
ments in  Illinois  have  no  steel  departments  and  all  their  product 
is  sold  in  the  form  of  pig  iron."* 

The  concentration  of  large  steel  mills  corresponds  closely 
with  that  of  the  blast  furnaces,  but  there  also  are  numerous  small 
steel  plants,  scattered  throughout  Illinois  and  Indiana,  because  this 
branch  of  the  industry  can  be  carried  out  on  a  small  scale.  These 
smaller  plants  can  produce  steel  ingots  from  scrap,  or  from  pig 
iron  and  scrap  combined.  Consequently,  they  need  not  be  located 
near  the  blast  furnaces.  Examples  of  these  can  be  found  at  Chicago 
Heights,  East  Chicago,  Terre  Haute,  and  elsewhere.  It  is  not 
possible  to  discover  the  total  production  of  such  plants,  since  no 
separate  statistics  are  given.  A  number  of  the  present  large  scale 
producers  in  the  Calumet  District  began  operations  in  just  such  a 
small  way.  In  most  cases  they  produced  crucible  steel,  and,  in 
more  recent  times,  some  electric  steel,  since  the  methods  of  pro- 
ducing both  these  types  are  suited  to  small  scale  operations. 

The  productive  capacity  of  the  steel  mills  can  be  used  to  show 
the  importance  of  the  Calumet  District  in  the  Northern  Interior, 
since  it  is  impossible  to  obtain  figures  of  actual  production.  The 
steel  plants  in  the  Calumet  District  have  a  capacity  of  8,545,935 
tons  per  year.   This  is  divided  among  six  plants.   The  outstanding 

^U.  S.  Census  Report,  191 9,  IX,  p.  391. 

^a.  The  Iroquois  Iron  Company,  at  South  Chicago,  produces  pig  Iron 
for  the  use  of  the  Youngstown  Sheet  and  Tube  Company  at  Indiana  Harbor, 
b.  The  Federal  Furnace  Company,  South  Chicago. 


22  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [202 

feature  is  the  enormous  productive  power  of  two  of  the  plants, 
one  of  them  at  Gary  and  one  at  South  Chicago,  operated  by  the 
Indiana  Steel  Company  and  the  Illinois  Steel  Company  respective- 
ly. Together  these  have  a  capacity  of  over  5,000,000  tons,  or  more 
than  60%  of  the  total  productive  capacity  of  the  group.  Of  the 
others,  that  of  the  Inland  Steel  Company  comes  next  with 
1,000,000  tons,  and  that  of  the  Youngstown  Sheet  and  Tube  Com- 
pany third  with  about  700,000  tons.  The  two  remaining  plants 
are  much  smaller.  The  actual  production  of  all  the  plants  of  the 
district  in  1923  was  about  6,000,000  tons,  roughly,  22%  of  the 
total  output  for  the  United  States.^ 

Illinois  and  Indiana  have  a  productive  capacity  of  5,710,425 
tons  and  5,500,915  tons  respectively,  or  a  total  of  11,211,340  tons. 
Of  this  amount  the  Calumet  District  possesses  approximately  70%. 
About  half  the  productive  power  of  Illinois,  and  86%  of  that  of 
Indiana,  is  concentrated  in  the  Calumet  District. 

The  importance  of  this  industry  as  compared  with  other 
types  of  manufacturing  in  Illinois  and  Indiana  can  be  seen  readily 
by  comparing  the  number  of  workers  employed.  In  1919,  Illinois 
had  753,458  wage  earners  engaged  in  manufacturing  and  other 
mechanical  industries.  Of  these,  95,048,  or  12%,  were  employed 
in  the  iron  and  steel  industry,  2,129  i^  connection  with  blast 
furnaces,  and  20,177  in  steel  mills  and  rolling  establishments. 
The  remaining  72,742  were  employed  in  fabricating  industries 
which  depended  upon  blast  furnaces  and  steel  mills  for  their  raw 
materials.  Similarly,  out  of  331,  484  engaged  in  the  same  group  of 
industries,  Indiana  had  60,871,  or  18%,  in  iron  and  steel  plants, 
the  former  employing  1,368  and  the  latter  22,362.  The  remaining 
37,141  were  employed  in  iron  and  steel  fabricating  plants.^ 

^Steel  Ingot  Capacity — Calumet  District  1924 
(Thousands  of  Tons) 

Illinois  Steel  Company 2,975 

Indiana  Steel  Company 2,450 

Inland  Steel  Company 1,000 

Youngstown  Sheet  and  Tube  Company 700 

Wisconsin  Steel  Company 400 

Interstate  Steel  Company 225 

Based  on  the  Report  of  the  Federal  Trade   Commission, 
Docket  740,  Exhibit  6858. 

«[/.  S.  Census  Report,  191 9. 


203]  THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY  23 

In  1920,  the  eight  blast  furnace  and  steel  mill  establishments 
located  in  the  Calumet  District  gave  employment,  on  the  average, 
to  20,000  men.  These  represented  about  43%  of  the  total  number 
engaged  in  this  industry  in  Illinois  and  Indiana,  or  approximately 
5%  of  the  total  for  the  United  States. 

In  the  United  States  as  a  whole,  the  Calumet  District  ranks 
third  in  the  production  of  iron  and  steel,  Pennsylvania  and  Ohio 
being  first  and  second,  respectively.^  Although  there  have  been 
marked  fluctuations  in  production  from  year  to  year,  owing  to 
market  conditions,  there  has  been  a  definite  and  marked  increase, 
especially  since  1908  when  the  Gary  mills  were  built.  The  out- 
standing facts  gained  from  a  study  of  the  statistics  are,  (i)  the 
predominance  of  the  Pittsburgh  District  in  all  phases  of  iron  and 
steel  production,  (2)  the  relatively  small  part  of  the  total  which 
the  Calumet  District  produces,  (3)  the  fact  that  capacity  produc- 
tion in  the  Calumet  District  in  contrast  with  that  in  the  leading 
district  is  in  process  of  considerable  extension. 

The  consumption  of  iron  ore  is  a  first  rate  indication  of  the 
relative  importance  of  the  Calumet  District  compared  with  the 
eastern  centers.  Table  II  shows  the  total  shipments  of  ore  from 
the  Lake  Superior  Region  and  the  amounts  received  at  the  Calumet 
ports.  From  this  it  will  be  seen  that  these  received  one-fourth  of 
the  total  ore  moved  in  1925,  and  a  little  less  than  that  proportion 
in  1923.    In  1921  it  was  one-fifth,  and  in  1919,  one  sixth.    These 

"The  Iron  and  Steel  industry  of  Illinois,  Iitdiana,  Ohio,  and  Pennsyl- 
vania, is  concentrated  into  three  districts  which  do  not  coincide  with  political 
boundaries,  namely: 

(i)  Western  Pennsylvania  and  eastern  Ohio — the  Pittsburgh-Cleve- 
land District. 

(2)  Eastern  Pennsylvania — the  Bethlehem  District. 

(3)  Indiana-Illinois — the  Calumet  District. 

No  figures  are  available  which  will  permit  a  comparison  of  production 
under  this  grouping.  The  United  States  Census  Reports  do  not  differentiate 
between  eastern  and  western  Pennsylvania.  Consequently,  the  Calumet 
District  has  been  compared  with  Pennsylvania  and  Ohio  separately. 

The  consumption  of  iron  ore  by  districts,  in  1922,  was  as  follows: 
(i)  Pittsburgh-Cleveland  District 39,800,000  tons 

(2)  Bethlehem  District 13,300,000  tons 

(3)  Calumet  District 9,000,000  tons 

These  figures  justify  the  statement  that  the  Calumet  District  ranks 
third  in  the  United  States  in  the  production  of  iron  and  steel. 

Based  on  data  published  by  the  Lake  Superior  Iron  Ore  Association,  1923. 


24 


IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT 


[204 


TABLE  II* 

Total  Shipments  of  Lake  Superior  Ore  and  Receipts 
AT  Calumet  Ports,  1901-1925 

(Millions  of  Tons) 


Year 

Total 
Shipments 

Receipts  at 

Calumet 

Ports 

Year 

Total 
Shipments 

Receipts  at 

Calumet 

Ports 

1901 

1902 

1903 

1904 

1905 

1906 

1907 

1908 

1909 

1910 

1911 

1912 

1913 

21 
28 

24 
21 

34 
37 
42 
26 
42 
43 
33 
48 
50 

2.5 
3.4 
3.1 
2.6 

3.0 

4.25 

4.65 

6.43 
7-1 
5.55 
8.1 

8.45 

1914 
1915 
1916 
1917 
1918 
1919 
1920 
1921 
1922 
1923 
1924 
1925 

33 
47 
67 
59 
58 

tl 
23 

45 
60 
42.6 
54-1 

6.2 

7.8 
II. 0 
II. 8 
".3 

8.3 
II.  I 

5-4 

9.0 

12.5 

9.1 
13.2 

*Based  on  data  supplied  by  the  Lake  Superior  Iron  Ore  Association,  1925,  and  Iron  Ores 
0/  Lake  Superior  (1923),  by  Crowell  and  Murray. 


comparisons  show  the  increasing  relative  importance  of  this 
district. 

A  characteristic  of  the  Calumet  District  is  the  large  size  of 
the  blast  furnace  establishments.  The  Indiana  Steel  Company's 
plant  at  Gary  is  the  largest  in  America.  It  has  12  furnaces. 
The  Illinois  Steel  Company  at  South  Chicago  has  11,  and  its 
plant  corresponds  in  size  with  the  largest  two  in  the  East,  namely, 
the  Carnegie  plant  at  Pittsburgh,  and  that  of  the  Bethlehem  Steel 
Corporation  at  Johnstown.  It  should  also  be  borne  in  mind  that 
while  all  the  furnaces  in  the  Calumet  District,  with  one  exception, 
are  of  large  size  and  recent  construction,  there  are  many  small, 
old-fashioned  furnaces  both  in  Ohio  and  in  Pennsylvania.  Conse- 
quently, the  average  production  per  furnace  in  the  Calumet  Dis- 
trict is  higher  than  in  these  two  states,  and  at  the  same  time  the 
most  modern  methods  and  conservation  practices  can  be  employed 
to  reduce  the  costs  of  production. 

In  1921,  Illinois-Indiana,  with  39  active  blast  furnaces,  pro- 
duced only  500,000  tons  less  than  did  Ohio,  with  53  active  furnaces, 
and  one-half  as  much  as  did  Pennsylvania  with  91     (Table  III). 

The  production  figures  also  show  another  important  fact. 
Except  in  the  case  of  Illinois-Indiana,  there  was  a  lower  production 


20! 


THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY 


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26  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [206 

of  pig  iron  in  the  various  districts  of  the  United  States  in  1921  than 
in  1914.  Illinois-Indiana  showed  a  slight  increase.  The  total  value 
of  the  product  of  Illinois-Indiana  was  $77,000,000  which  was 
approximately  two-thirds  that  of  Ohio  and  one-half  that  of 
Pennsylvania.  In  1923,  the  production  in  Illinois-Indiana  was 
twice  that  of  1914,  while  the  increase  in  Pennsylvania  and  in  Ohio, 
though  large,  was  less  striking. 

It  will  be  noticed  from  the  figures  in  Table  III  that  many  more 
wage  earners  are  employed  in  steel  and  rolling  mills  than  in  blast 
furnace  plants.  This  is  due  to  the  nature  of  the  industry  and  the 
number  of  processes  through  which  the  steel  passes  before  it 
emerges  in  merchantable  forms.  The  actual  making  of  the  steel 
is  only  one  phase  of  the  industry.  The  three-  or  four-ton  ingots 
pass  immediately  to  the  blooming  and  rolling  mills  for  conversion 
into  the  forms  in  which  the  steel  reaches  its  markets.  Billets  must 
be  rolled,  cut,  rolled,  and  re-rolled  into  shapes,  before  they  leave 
the  mill.  The  processes  are  almost  continuous,  one  following  the 
other  with  a  minimum  of  delay.  Hence  the  number  of  men  em- 
ployed is  large  compared  with  the  number  needed  in  a  blast  fur- 
nace plant. 

In  1 921,  there  were  three  times  as  many  men  employed  in 
blast  furnace  plants  in  Pennsylvania  as  in  Illinois-Indiana,  and 
four  times  as  many  in  steel  mills,  while  Ohio  employed  more  than 
twice  as  many  in  both  branches  of  the  industry  (Table  III). 
There  are  marked  fluctuations  in  the  numbers  from  year  to  year^ 
but  it  should  be  noted  that  Illinois-Indiana  shows  a  slight  increase 
in  1921  over  1914,  and  a  very  much  greater  one  in  1923.  The  great 
additions  made  to  almost  all  the  plants  there  in  191 9  were  in  part, 
if  not  altogether,  responsible  for  the  increase. 

The  numbers  employed  indicate  clearly  the  trends  of  pro- 
duction. In  1921,  the  Illinois-Indiana  output  of  steel,  also,  was 
greater  than  in  1914.  An  examination  of  the  earlier  figures  for  this 
district  shows  a  consistent  increase  with  much  less  fluctuation  than 
occurred  in  Ohio  or  Pennsylvania.  In  1921,  Ohio  produced  less 
than  1,000,000  tons  more  than  Illinois-Indiana,  while  Pennsyl- 
vania produced  3,000,000  tons  more.  It  is  noteworthy  to  re- 
member that  at  least  70%  of  the  3,947,731  tons  produced  in  Illi- 
nois-Indiana was  contributed  by  the  Calumet  District.  In  1923,. 
the  output  of  steel  in  Illinois-Indiana  increased  100%.  Elsewhere 
the  increase  was  relatively  smaller. 


20/]  THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY  2/ 

The  influence  of  the  war  period,  as  shown  by  the  figures  of 
1 91 9,  with  its  high  prices  and  its  high  costs  of  labor  and  of  ma- 
terials, is  evident  from  the  much  higher  value  of  the  products 
compared  with  1914.  This  was  due  to  the  increased  demand 
which  resulted  in  higher  prices  and  increased  production.  The 
value  of  the  Illinois-Indiana  production  amounted  to  about  one- 
third  of  the  Pennsylvania  production  and  two-thirds  of  that  of 
Ohio.  In  1923,  the  value  of  steel  produced  in  Illinois-Indiana 
was  more  than  double  that  of  1921  and  four  times  that  of  1914 
(Table  III). 

The  growing  significance  of  the  Calumet  District  as  a  pro- 
duction center  for  iron  and  steel  is  very  evident.  Extensions  are 
In  progress  in  every  plant  in  the  district.  New  furnaces  for  the 
production  of  iron  and  steel  are  being  added.  The  new  National 
Tube  plant  at  Gary  is  being  constructed  rapidly.  Other  new 
plants  are  being  considered.  Jones  and  Laughlin  of  Pittsburgh 
have  purchased  2,000  acres  for  a  $100,000,000  steel  plant  at 
Hammond,  adjoining  the  Indiana  Harbor  Canal.  The  Inland 
Steel  Company  has  purchased  540  acres,  adjoining  100  acres  which 
it  had  previously  acquired  near  Gary,  in  order  to  provide  for 
future  expansion.  The  Aetna  Iron  and  Steel  Company  also  has 
bought  400  acres  at  Gary  for  a  steel  mill.  Several  eastern  steel- 
fabricating  companies  own  large  sites  in  the  district  which  they 
are  holding  for  future  development.  All  of  these  projected  plants 
will  derive  the  major  part  of  their  raw  material  from  the  local 
steel  mills.  There  seems  to  be  abundant  evidence  for  believing 
that  this  district  is  destined  to  become  a  second  "Pittsburgh" 
in  the  iron  and  steel  Industry  of  the  United  States. 

The   Development  in  the   Calumet  District  Accompanied 
THE  Decline  in  Chicago 

Prior  to  the  founding  of  the  South  Chicago  works  of  the  Illi- 
nois Steel  Company  at  the  mouth  of  the  Calumet  River  in  1880, 
there  was  no  industrial  development  In  the  district  at  all.  Until 
that  time  the  iron  industry  in  this  part  of  the  country  had  been 
concentrated  along  the  Chicago  River  near  the  heart  of  the  city. 
It  had  developed  from  the  small  foundries  which  were  built 
beside  that  navigable  waterway  in  1839.^    With  the  increasing 

^Andreas,  A.  T.,  History  oj  Chicago,  I,  p.  567. 


28  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [208 

demand  for  products  of  iron  and  steel,  these  industries  expanded 
rapidly.  The  great  railroad  building  era  of  the  1850's  and  i86o's 
had  encouraged  the  building  of  rolling  mills  for  the  production  of 
iron  rails.  The  local  demand  for  iron  together  with  the  suitability 
of  the  high  grade  Brazil  block  coal  of  Indiana  for  smelting  the  Lake 
Superior  iron  ore  which  had  become  available  because  of  the  open- 
ing of  the  Soo  Canal  in  1855,  was  responsible  for  the  building  of 
the  first  blast  furnaces  in  1868.^  Previously  all  the  pig  iron  had 
been  imported  from  the  East.  The  success  of  these  first  local 
furnaces  encouraged  the  erection  of  others,  for  the  rapidly  filling 
Northern  Interior  constituted  a  rapidly  increasing  market  for  all 
forms  of  iron,  and,  as  railroad  building  progressed,  a  wider  and 
wider  area  became  tributary  to  Chicago. 

With  the  adoption  of  the  Bessemer  process  by  the  Chicago 
Rolling  Mill  Company  in  1872,  the  industry  received  a  still  greater 
impetus. 

Railroads  made  the  greatest  demands  on  the  products  of  the 
rolling  mills  by  their  rapid  adoption  of  steel  rails  in  place  of  iron 
rails.  As  early  as  1876,  Chicago  produced  85,000  tons  of  steel 
rails,  which  were  almost  one-third  the  total,  290,000  tons,  for  the 
United  States.^"  It  was  to  meet  the  demands  for  steel  and  for  in- 
creased production  that  the  first  Calumet  plant  was  built  in  1880. 
From  its  very  inception  its  main  product  was  steel  and  not  iron 
as  in  the  case  of  the  Chicago  plants.  The  South  Chicago  mill  was 
planned  on  a  very  much  larger  scale  than  the  other  plants  in  the 
city.  This  was  practicable  since  it  was  located  in  an  almost  empty 
area  where  there  was  abundant  space  for  industrial  expansion, 
unhampered  by  urban  development. 

After  1880,  the  iron  and  steel  industry  in  the  Calumet  District 
grew  in  size  and  scope,  while  it  gradually  declined  along  the  Chi- 
cago River.  At  the  present  time  there  is  no  iron  or  steel  smelted 
along  the  Chicago  River,  The  old  sites  are  used  for  other  purposes 
more  suited  to  congested  urban  areas.  The  Calumet  District,  on 
the  other  hand,  has  offered  such  material  advantages  that  it  has 
become  the  center  of  iron  and  steel  production  in  the  Northern 
Interior  and  the  third  largest  producer  in  America. 

'Andreas,  A.  T.,  op.  cit.,  II,  p.  674. 
^mid..  Ill,  p.  471. 


Th£     (80N     AND    5rE£i    Plants 


CftLVMBT    District 


Figure  1 


209]       the  magnitude  and  character  of  the  industry  29 

The  Distribution  of  Iron  and  Steel  Plants  Within  the 
Calumet  District 

Two  types  of  location  are  utilized  as  sites  for  iron  and  steel 
mills  in  the  Calumet  District.  Six  plants  are  to  be  found  on  the 
Lake  Shore,  and  three  along  the  improved  lower  course  of  the 
Calumet  River  (Fig.  i). 

Lake  Shore  Locations. — By  far  the  largest  land  holding  along 
the  lake  shore  is  that  of  the  United  States  Steel  Corporation 
owned  through  the  medium  of  its  subsidiary,  the  Indiana  Steel 
Company.  The  property  extends  along  the  entire  shore  from  the 
corporate  limits  of  Indiana  Harbor  to  the  eastern  limits  of  the 
site  occupied  by  the  Gary  National  Tube  Mills.  The  whole  of  it 
comes  within  the  corporate  limits  of  Gary.  The  eastern  part  of  the 
property  is  occupied  by  the  famous  Gary  Steel  Mills  and  by  the 
new  National  Tube  Mills,  which  are  approaching  completion. 
The  former  are  primarily  producers  of  steel,  and  the  latter  also 
will  give  their  main  attention  to  this  phase  of  the  industry.  Three 
fabricating  plants  are  located  in  the  western  part  of  the  property. 
The  American  Sheet  and  Tin  Plate  Company  and  the  American 
Bridge  Company  are  purely  steel  fabricating  plants,  dependent 
upon  the  steel  mills  for  their  raw  material.  Just  within  the  western 
limits  of  the  property  are  the  Buffington  Portland  Cement  Works, 
which  were  designed  to  utilize  the  slag  from  the  steel  mills  for  the 
production  of  cement.  This  is  in  essence  a  by-product  industry. 
Much  land  between  the  various  plants  is  vacant,  and  is  held  in 
order  to  accommodate  the  future  expansion  of  the  Corporations' 
activities,  and,  at  the  same  time,  to  prevent  other  interests  from 
getting  a  footing  in  that  section  of  the  lake  front. 

In  its  original  condition  the  site  occupied  by  the  steel  mills 
was  purely  a  waste  of  dune  and  swamp.  It  has  been  developed 
at  great  expense  on  an  enormous  scale  in  the  most  modern  and 
scientific  manner. 

When  the  United  States  Steel  Corporation  planned  to  extend 
its  capacity  by  building  a  large  plant  in  the  neighborhood  of 
Chicago,  certain  minimum  requirements  were  laid  down  regarding 
the  choice  of  the  site.  Its  agents  sought  a  moderately  priced  and 
compact  tract  of  land  centrally  located  in  the  Northern  Interior, 
which  provided  a  lake  harbor  with  sufficient  depth  of  water  to 
accommodate  the  largest  lake  vessels  in  the  ore  fleet,  together 
with  adequate  railroad  facilities. 


30  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [210 

It  happened  that,  in  the  late  1890's,  the  Meat  Packing  inter- 
ests of  Chicago  were  in  conflict  with  the  civic  authorities,  who 
complained  of  the  nuisance  created  by  the  odors,  of  the  pollution  of 
the  river,  and  of  other  disadvantages  resulting  from  the  location  of 
that  type  of  industry  in  one  of  the  more  congested  parts  of  the  city. 
Accordingly,  the  companies  concerned  combined  to  purchase  6,000 
acres  in  one  block  in  the  Calumet  District,  on  the  lake  shore,  far 
removed  from  the  then  settled  sections,  with  a  view  to  moving  their 
whole  business  away  from  the  city.  Their  purchase  consisted  of 
desolate  swamp  and  dune  land  located  on  the  site  of  the  Gary  steel 
mills  and  the  associated  fabricating  plants.  The  conflict  was 
settled  amicably  and  the  Meat  Packing  interests  remained  in  Chi- 
cago. In  1906,  this  lake  shore  property  was  purchased  en  bloc  by 
the  United  States  Steel  Corporation.  The  property  conformed  in 
most  respects  to  the  requirements  laid  down  for  the  selection  of  a 
mill  site.  There  was  no  harbor,  but  one  could  be  constructed  with 
relative  ease.  In  other  respects  no  better  selection  could  have  been 
made.  To  have  purchased  a  large  area  like  this,  in  small  lots,  would 
have  created  a  land  boom,  and  prices  would  have  soared.  As  it  was, 
the  deal  was  completed  In  one  operation.  The  price  per  acre  was 
in  terms  of  hundreds  of  dollars,  when  under  the  other  conditions 
it  would  have  been  very  much  higher.  It  is  interesting  to  com- 
pare this  transaction  with  the  recent  purchase  by  the  Jones  and 
Laughlin  Steel  Company,  from  the  East  Chicago  Land  Company 
and  the  State  of  Indiana.  This  site,  being  swamp  land,  had  not 
been  subdivided,  and  hence  it  was  possible  to  purchase  a  large 
acreage  in  one  block. ^^ 

The  oldest  established  shore  location  is  that  occupied  by  the 
plant  of  the  Illinois  Steel  Company  at  South  Chicago.  The  first 
establishment  on  this  site  was  the  South  Works  of  the  North 
Chicago  Rolling  Mill  Company,  built  in  1880  on  a  sandy  beach  on 
the  north  side  of  the  mouth  of  the  Calumet  River.  This  particular 
site  was  chosen  because  of  its  proximity  to  navigable  water,  in 
an  area  which  was  then  outside  the  city  limits.  Even  before  1880, 
the  company  had  realized  the  disadvantages  of  being  located  in  the 
heart  of  Chicago,  and  its  migration  to  the  Calumet  District  was  a 
natural  move.  The  site  chosen  there  was  worthless  for  agriculture, 
but  from  the  point  of  view  of  the  steel  smelter  it  was  a  very  good 

"P^p  in  Calumet,  Hammond  Chamber  of  Commerce,  Oct.-Nov.,  1924. 


21  l]  THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY  3  I 

one.  It  also  afforded  ample  space  for  future  expansion.  Indeed, 
with  the  later  improvement  of  the  harbor  and  river,  and  the 
dredging  of  the  north  and  south  slips,  this  became  an  excellent 
location.  The  expansion  of  Chicago  has  limited  the  possibilities 
for  enlarging  the  site  of  the  plant  on  the  landward  side,  although 
in  1880  the  owners  considered  they  had  a  site  large  enough  for  all 
time.  They  did  not  realize  what  enormous  growth  was  to  take 
place  in  the  industry.  By  1906,  most  of  the  land  that  had  been 
acquired  had  been  occupied  and  further  expansion  was  only  possi- 
ble by  the  acquisition  of  a  new  holding. 

The  plant  of  the  Iroquois  Company  was  established  in  the 
i88o's  on  the  south  side  of  the  Calumet  River,  just  above  the 
mouth.  The  original  plant  still  stands  on  the  old  site,  and  is  closely 
surrounded  by  small  iron  and  steel  fabricating  plants.  It  is  used 
only  occasionally  for  experimental  purposes.  The  superior  ad- 
vantages of  a  location  at  the  mouth  of  the  river  were  quickly  real- 
ized, and  in  the  1890's  the  Iroquois  Company  erected  a  new  plant 
on  the  south  side  of  the  entrance  to  the  river,  opposite  the  Illinois 
Steel  Plant.  This  site  was  larger,  more  easily  accessible  from  the 
lake,  and  also  offered  all  the  advantages  of  a  lake  shore  location. 
Since  then,  the  plant  has  changed  ownership  twice.  The  American 
Steel  and  Tube  Company  first  incorporated  it  with  its  plant  at 
Indiana  Harbor,  and  in  1923,  both  were  absorbed  by  the  Youngs- 
town  Sheet  and  Tube  Company.  Expansion  of  the  site  on  the  land- 
ward side  early  became  impossible  because  of  urban  development. 
What  vacant  shore  land  remained  was  either  dedicated  to  park 
purposes  by  the  civic  authorities,  or  became  subdivided  to  such 
a  degree  that  additional  land  was  much  too  expensive  to  buy  for 
industrial  purposes. 

Two  plants  occupy  shore  positions  at  Indiana  Harbor.  The 
Inland  Steel  Company  first  occupied  this  section  of  the  lake 
shore  in  1905.  It  was  the  nearest  site  to  Chicago  that  could  be 
obtained.  Originally  there  was  no  harbor,  but  it  was  easy  to 
dredge  a  slip  in  the  loose  lacustrine  and  glacial  material.  This  was 
completed  in  1906,  and  gave  adequate  harbor  facilities  to  the  ex- 
panding local  industry.  As  a  result,  this  part  of  the  Calumet 
District  was  placed  on  terms  of  equality  with  South  Chicago. 
The  Inland  Steel  Company  developed  rapidly  after  this  improve- 
ment, and  became  the  largest  independent  producer  in  the  North- 
ern Interior. 


32  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [212 

In  1 91 6,  the  American  Sheet  and  Tube  Company,  which 
had  been  established  for  some  years  at  Chicago  Heights,  migrated 
to  the  north  side  of  the  slip  which  formed  the  harbor,  where  a 
new  plant  was  built  with  a  lake  frontage  of  6,000  feet.  It  enjoyed 
the  same  facilities  as  its  neighbor,  and  its  rise  was  similarly  rapid. 
In  1923,  it  was  taken  over  by  the  Youngstown  Sheet  and  Tube 
Company,  and  it  now  forms  a  part  of  that  large  organization. 

River  Locations. — Three  plants  are  located  on  the  improved 
section  of  the  Calumet  River  in  the  neighborhood  of  io6th  Street. 
These  are  all  within  the  corporate  limits  of  Chicago,  although 
when  they  were  first  built  the  city  had  not  spread  so  far  east.  All 
these  river  positions  have  been  used  for  a  comparatively  long 
period.  The  reasons  why  the  founders  chose  the  particular  sites 
can  only  be  surmised.  The  history  of  the  plants  erected  there  is 
very  obscure,  as  they  have  changed  hands  a  number  of  times. 
There  seems  to  be  no  doubt  that  they  were  founded  in  the  1890's, 
after  the  river  had  been  somewhat  improved.  They  were  located 
near  the  margin  of  urban  settlement,  since  the  means  of  com- 
munication were  such  that  close  proximity  to  a  built  up  area 
ensured  a  satisfactory  labor  supply.  The  river  provided  connec- 
tion with  the  lake,  and  its  subsequent  improvement  has  given 
these  plants  similar  advantages  with  regard  to  lake  transportation 
and  water  supply  as  are  enjoyed  by  lake  shore  plants. 

Originally,  the  site  of  the  Wisconsin  Steel  plant  was  occupied 
by  a  small  iron  company  with  one  hand-filled  furnace.  This 
concern  was  purchased  in  1901  by  some  of  the  members  of  the 
Deering  family,  who  were  interested  in  the  manufacture  of  agri- 
cultural implements.  When  they  formed  the  Internat  onal  Har- 
vester Company,  the  iron  plant  was  affiliated  with  that  organiza- 
tion in  order  to  supply  it  with  iron  and  steel  for  the  manufacture 
of  agricultural  machinery.  Since  that  time  the  plant  has  been 
enlarged,,  but  it  maintains  this  intimate  connection  with  the 
fabricating  company,  which  consumes  the  bulk  of  its  products. 

The  Federal  Furnace  Company  is  located  on  the  east  side  of 
the  Calumet  River,  opposite  the  Wisconsin  Steel  plant.  At  the 
present  time  it  is  a  subsidiary  of  the  By-product  Coke  Corporation. 
The  site  was  chosen  in  the  1890's,  when  a  small  furnace  company 
was  founded.  From  191 2  to  191 5  it  was  operated  by  Pickands 
Mather  Company,  who  have  extensive  iron  mines  in  the  superior 


213]  THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY  33 

region.  In  191 5,  it  was  amalgamated  with  the  By-product  Coke 
Corporation,  but  it  was  operated  as  a  separate  unit  until  1922, 
when  control  was  centralized. 

The  Interstate  Iron  and  Steel  Company  originated  at  East 
Chicago  in  1905,  as  a  small  crucible  steel  producing  concern. 
From  this  inland  site  it  migrated  to  navigable  water  by  purchasing 
the  steel  plant  of  the  Grand  Crossing  Tack  Company,  which  was 
located  half  a  mile  above  that  of  the  Wisconsin  Steel  Company. 
In  addition  to  the  advantage  of  accessibility  from  the  lake,  the 
acquired  property  had  good  railroad  connection  with  the  com- 
pany's tack  plant  at  Grand  Crossing,  well  inside  the  city  limits. 

The  sites  occupied  by  the  two  last  named  plants  are  com- 
paratively small,  but  well  in  excess  of  present  needs. '^ 

Modern  Methods  and  Equipment  Reduce 
Costs  of  Production 

Modern  equipment,  and  the  application  of  up-to-date 
methods,  have  made  it  possible  for  producers  in  the  Calumet  Dis- 
trict to  reduce  their  costs  of  production  to  such  an  extent  that 
they  have  overcome  the  disadvantage  of  the  high  cost  of  bringing 
coal  from  eastern  Kentucky  and  West  Virginia.  This  has  been 
accomplished  chiefly  by  the  careful  utilization  of  by-products 
which  could  be  substituted  for  coal.  In  turn,  large  scale  produc- 
tion with  modern  equipment  has  enabled  them  to  accomplish  this. 
Judge  Gary  admitted  that  costs  of  production  were  14%  lower  at 
Gary  than  at  Pittsburgh,  and  the  Federal  Trade  Commission  at 
the  hearing  on  "Pittsburgh  Plus"  conclusively  verified  this 
statemerjt.  In  1920,  the  Calumet  District  produced  456,308  tons, 
or  40%  tjf  the  total  United  States  tonnage  of  structural  shapes, 
at  a  cos^  of  $42,825  per  gross  ton.  The  Pittsburgh  District  pro- 
duced 56.2%  at  $52,207  per  ton.  The  Calumet  District  thus 
had  the  advantage  of  $9,342  per  ton.  This  represents  a  difference 
in  costs  of  18%  in  favor  of  the  latter.  In  the  case  of  plates,  the 
Calumet  District  manufactured  664,602  tons,  or  32.7%  of  the 
total  output  of  the  country,  at  an  advantage  of  1.5%  lower  cost. 
In  the  same  year  839,270  tons  of  merchant  bars,  or  35.7%  of  the 

^^For  much  of  the  above  information  the  writer  is  indebted  to  the  officials 
of  thepvajious  companies. 


34  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [214 

United  States  production  (2,347,913  tons)  were  made  in  the 
Calumet  District  at  ?4.638  per  ton  less  than  in  the  Pittsburgh 
District.  These  two  centers  produce  all  the  black  sheets  that  are 
made  in  the  country,  but  costs  are  9.3%  lower  in  the  Calumet 
District.  The  latter  has  an  advantage  over  the  Pittsburgh  Dis- 
trict in  the  cost  of  producing  these  four  commodities  of  14.5% 
(Table  IV).  In  fact,  steel  can  be  produced  cheaper  in  the  Calumet 
District  than  anywhere  else  in  the  country.  The  highly  effective 
organization  of  the  industry  there,  the  modern  equipment  em- 
ployed, and  the  proximity  to  Chicago,  are  among  the  outstanding 
advantages  of  the  Calumet  District. 

The  Dominant  Feature  of  the  Industry  Is 
Large  Scale  Production 

Large  scale  modern  units  predominate  in  the  Calumet  Dis- 
trict. They  represent  the  results  of  consolidations  and  mergers. 
The  development  of  large  scale  production  requires  an  enormous 
outlay  of  capital,  since  the  equipment  of  an  iron  and  steel  plant  is 
particularly  expensive.  The  nature  of  the  industry  requires  a  large 
acreage,  which  entails  considerable  initial  outlay.  The  recent 
expenditure  of  the  Jones  and  Laughlin  Steel  Company  illustrates 
this  fact. 

The  desire  of  the  different  corporations  to  control  large  re- 
serves of  raw  material  has  been  responsible  in  part  for  a  number 
of  mergers,  since  by  amalgamating  individual  properties  the 
resources  for  future  use  by  the  combined  companies  are  better 
assured.  The  recent  merger  of  the  American  Sheet  and  Tube  Com- 
pany with  the  Youngstown  Sheet  and  Tube  Company  is  an  illus- 
tration of  this  tendency.  The  Inland  Steel  Company  has  been 
attempting  a  similar  union  with  both  Eastern  and  Middle  West 
interests. 

Most  of  the  producers  in  the  Calumet  District  already  form 
units  of  some  larger  organizations.  Thus  the  Illinois  Steel  Company 
and  Indiana  Steel  Company  are  subsidiaries  of  the  United  States 
Steel  Corporation,  the  Wisconsin  Steel  Company  is  a  part  of  the 
International  Harvester  Company,  the  Federal  Furnace  Plant 
is  a  unit  of  the  By-products  Coke  Corporation,  and  the  Iroquois 
Iron  Company,  of  the  Youngstown  Sheet  and  Tube  Company. 


215] 


THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY 


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36  iron  and  steel  industry  of  the  calumet  district      [216 

Products 

Iron  and  steel  in  almost  all  their  forms  are  produced  in  the 
Calumet  District,  but  the  major  interest  is  in  steel  products,  since 
the  demand  for  them  is  very  much  greater  than  that  for  iron  pro- 
ducts. 

There  are  two  establishments  which  produce  pig  iron  only. 
The  output  of  one  of  these,  the  Iroquois  plant,  is  utilized  almost 
entirely  for  steel  purposes  by  the  Youngstown  Sheet  and  Tube 
Company  at  Indiana  Harbor.  The  other  establishment,  the 
Federal  Furnace  Plant,  produces  pig  iron  for  sale.  It  makes,  in 
accordance  with  definite  specifications  laid  down  by  purchasers, 
all  grades  and  qualities  of  pig  iron  which  are  included  under  the 
terms  basic,  malleable,  and  foundry.  In  order  to  meet  the  re- 
quirements of  the  different  iron  fabricators,  as  many  as  fifteen 
different  grades  of  ore  are  used.  These  are  purchased  as  much  for 
their  magnesium,  phosphorus,  and  silica  content,  as  for  the  per- 
centage of  iron  they  contain,  since  the  uses  to  which  the  iron  is 
put  are  determined  by  the  quantity  of  each  of  these  substances. 
Thus  a  manufacturer  of  radiators  demands  a  foundry  iron  which 
is  high  in  phosphorus  and  magnesium,  since  these  ingredients  give 
the  iron  fluidity  and  greater  strength.  Many  variations  are  pro- 
vided in  the  chemical  content  of  the  three  commercial  types  of 
pig  iron  used.  The  production  of  pig  iron  for  commercial  use 
entails  very  frequent  changes  in  the  mixture  which  goes  into  the 
furnace.  On  the  other  hand,  when  iron  is  being  produced  for  steel 
purposes  a  furnace  will  run  for  months  on  practically  the  same 
mixture. ^^ 

There  is  some  commercial  production  of  pig  iron  by  the  blast 
furnaces  attached  to  the  steel  mills.  This  includes  any  surplus 
that  may  be  made,  and  also  the  Sunday  or  holiday  production  of 
the  blast  furnaces,  which  is  converted  into  pigs  when  the  steel 
plant  is  not  working.  There  are,  however,  fewer  variations  in  the 
chemical  analysis  of  this  pig  iron  than  in  the  commercial  product, 
and  the  market  served  is  much  less  specialized.  The  steel  com- 
panies sell  pig  iron  because  they  prefer  not  to  re-heat  pigs,  for  this 
entails  additional  cost. 

The  two  most  common  types  of  steel  are  produced  by  the 
Open  Hearth  and  the  Bessemer  processes.  Each  has  character- 
istics which  make  it  suited  to  special  uses,  but  Open  Hearth  steel 
is  far  superior  to  the  other  for  most  purposes.   The  tensile  strength 

^^Blast  furnace  operations  explained  by  superintendents. 


217]  THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY  37 

of  Steel  depends  upon  its  chemical  composition.  By  the  Open 
Hearth  method  this  can  be  controlled  accurately  during  the 
"heat."  In  the  case  of  Bessemer  steel  the  product  depends  to  a 
much  greater  degree  upon  the  qualities  of  the  molten  iron  used, 
as  no  changes  can  be  made  during  the  conversion.  The  demand 
for  Open  Hearth  steel  has  become  far  greater  than  for  Bessemer, 
owing  to  its  greater  range  of  use,  and  greater  strength,  x^nother 
factor  has  been  important  in  connection  with  the  production  of 
Bessemer  steel.  This  process  necessitates  the  use  of  a  much  purer 
grade  of  pig  iron  than  does  the  other.  At  the  present  time,  the 
supplies  of  "Bessemer  Ore"  are  much  less  than  they  were  ten  years 
ago.  Indeed,  the  more  accessible  deposits  are  approaching  exhaus- 
tion rapidly.  The  enormous  demand  for  steel  has  necessitated  the 
use  of  what  is  known  as  "Non-Bessemer  Ore,"  which  exists  in 
much  greater  quantities,  and  the  product  from  this  is  quite  suit- 
able for  use  in  Open  Hearth  furnaces.  Hence  there  has  been  a 
decline  in  the  production  of  Bessemer  compared  with  that  of 
Open  Hearth  steel.  The  figures  in  Table  V  show  the  rapid  increase 
in  the  production  of  the  latter  in  the  last  fourteen  years. 

There  seems  to  be  a  general  consensus  of  opinion  throughout 
the  Calumet  District  that  the  peak  production  of  Bessemer  steel 
was  reached  some  years  ago,  and  that  now  it  is  a  declining  indus- 
try so  far  as  this  district  is  concerned.  Until  1924,  the  Wisconsin 
Steel  Company  produced  only  Bessemer  steel,  but  it  has  recently 
installed  an  Open  Hearth  equipment.  The  company  is  planning 
already  to  extend  this  department  in  the  near  future. 

In  1921,  Illinois  and  Indiana  produced  3,947,531  tons  of 
steel.  Of  this  total  3,369,653  tons,  or  84%,  was  made  by  the 
Open  Hearth  process,  and  only  565,839  tons  were  Bessemer. 
Table  V  shows  the  production  of  these  two  states  for  a  number  of 
years  and  the  trend  both  in  type  and  tonnage  can  be  clearly  seen. 

Another  important  factor  which  has  affected  the  production 
of  Open  Hearth  steel  is  the  fact  that  50%  of  every  "heat"  is  com- 
posed of  scrap  steel.  The  effect  of  this  is  to  halve  the  consumption 
of  pig  iron.  Thus  with  a  given  blast  furnace  equipment,  a  steel 
company  which  adopts  the  Open  Hearth  in  place  of  the  Bessemer 
process,  can  double  its  output  of  steel  without  any  additional  pig 
iron.  This  cuts  down  the  capital  expenditure  on  the  plant  and  at 
the  same  time  fosters  larger  production. 


38 


IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT 


[218 


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219]  THE   MAGNITUDE  AND  CHARACTER  OF  THE   INDUSTRY  39 

Most  of  the  steel  leaves  the  mills  in  a  finished  or  partly- 
finished  form.  The  ingots  in  all  cases  are  rolled  into  commercial 
sizes,  such  as  billets,  sheets,  blooms,  bars.  These  serve  as  the  raw 
material  for  a  large  number  of  steel-fabricating  industries,  which 
are  scattered  over  the  region  which  is  served  by  the  Calumet 
mills.  The  bulk  of  the  steel,  however,  is  converted  into  "forms 
and  shapes"  before  it  leaves  the  mill.  Consequently,  every  steel 
plant  has  a  more  or  less  complete  rolling  establishment  attached 
to  it,  to  which  the  white-hot  ingots  are  taken  as  soon  as  they 
leave  the  moulds.  There  they  are  rolled  and  cut  to  size,  and  trans- 
ferred to  the  finishing  mills  which  roll  them  into  rails,  shapes, 
structural  steel,  bars,  plates,  sheets,  tubes,  etc.  In  most  cases, 
these  are  finished  products,  ready  for  immediate  use.  In  some 
cases,  they  pass  on  to  other  departments  for  finishing  processes, 
such  as  tin  plating,  or  galvanizing.  Generally  all  these  processes 
are  carried  out  in  the  same  plant. 

Modern  equipment  permits  the  manufacture  of  a  wide  variety 
of  different  shapes  with  the  same  machinery,  since  it  is  a  relatively 
simple  matter  to  change  the  rolls,  and,  therefore,  the  form  of  the 
product.  Thus,  for  example,  a  rolling  mill  may  produce  rails  in  the 
morning  and  structural  shapes  in  the  afternoon  of  the  same  day. 

The  percentage  of  electric  and  crucible  steel  which  is  made  in 
the  Calumet  District  is  very  small.  The  product  is  both  high 
in  quality  and  in  price,  and  its  use  is  limited  to  certain  Industries 
which  specialize  in  the  highest  grades  of  steel  for  special  tools  and 
scientific  apparatus.  The  bulk  of  the  electric  steel  is  produced  by 
the  Illinois  Steel  Corporation.  The  small  size  of  this  particular 
phase  of  the  steel  industry  makes  it  suitable  for  location  where 
there  is  a  steady  local  demand  for  that  particular  type  of  product. 
In  this  way,  transportation  costs  are  reduced  to  a  minimum. 
Such  plants  exist  in  a  number  of  the  urban  centers,  and  especially 
within  Chicago.  New  York  and  other  great  eastern  centers  figure 
much  more  prominently  in  this  phase  of  the  steel  industry  than 
does  the  Calumet  District.  It  is  impossible,  from  the  available 
data,  to  obtain  detailed  figures  of  the  production  of  iron  and  steel 
by  individual  plants  in  Illinois  and  Indiana.  Consequently,  the 
tonnage  of  the  various  types  of  products  in  the  Calumet  District 
cannot  be  stated,  even  approximately.  Hence,  the  discussion  has 
been  limited  throughout  to  the  broad  facts  which  could  be  deduced 
from  the  available  material.   The  plants  of  the  Illinois  Steel  Com- 


40  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT  [220 

pany  and  the  Indiana  Steel  Company  produce  practically  every 
form  of  steel  and  every  type  of  steel  product.  Their  specialties 
consist  of  steel  rails,  plates,  shapes,  and  bars.  The  Wisconsin 
Steel  Company,  as  already  noted,  is  a  subsidiary  of  the  Inter- 
national Harvester  Company,  and  specializes  in  the  produc- 
tion of  steel  for  use  in  the  manufacture  of  agricultural  imple- 
ments. Any  surplus  is  utilized  by  other  fabricating  plants  of  a 
similar  character.  The  Interstate  Steel  Company  is  mainly  in- 
terested in  serving  its  own  plant  which  specializes  in  wire  products. 
The  Inland  Steel  Company  produces  a  line  of  goods  similar  to  that 
of  the  Illinois  Steel  Company,  in  which  railroad  equipment  forms 
a  large  part.  The  Youngstown  Sheet  and  Tube  Company,  as  its 
name  indicates,  is  primarily  interested  in  the  production  of  lap 
weld  and  butt  weld  tubes,  of  which  it  produces  nearly  400,000  tons 
annually.   The  surplus  steel  is  rolled  into  plates  and  sheets. 


sources  or  suppiy.    npproxima.eiy    /370  ui    uic  u.c   -^^  ^   ^"^ 
Calumet  District  comes  from  these  more  recently  worked  ranges, 


41 


TW£  Iron  rno  SvEtu  Ihdustry  of  ive    Cbiuwct  JJiSTfucr. 


The  Sources    hno  MoveneNT 

OF 

IRON   one.  ,  COfli.  ,  LMEbTTDNS 


Figure  2 


CHAPTER  II 

THE  LOCATION  OF  THE  CALUMET    DISTRICT  WITH 

REFERENCE  TO  AREAS  FROM  WHICH  IT 

DRAWS  RAW  MATERIALS 

The  Calumet  District  is  favorably  situated  with  regard  to 
supplies  of  raw  materials.  High  grade  ore,  coal,  and  limestone 
can  be  assembled  with  relative  ease  at  reasonable  costs.  All  lake 
borne  materials  can  be  unloaded  from  boats  directly  on  to  the 
docks  of  the  steel  plants.  In  respect  to  iron  ore,  the  Calumet 
producers  have  an  advantage  over  those  of  inland  centers  in  the 
Pittsburgh  District  who  are  obliged  to  transport  their  supplies  a 
considerable  distance  by  rail  from  Lake  Erie  ports. 

Iron  Ore 

ConsiunptioJi  and  Sources. — The  Calumet  District  obtained 
over  9,000,000  tons  of  iron  ore  from  the  Lake  Superior  region  in 
1924.  The  mines,  in  the  six  rather  widely  separated  fields,  are  re- 
latively short  distances  from  the  lake  ports  (Fig.  1).  In  the  east  is 
the  Menominee  field,  which  covers  a  wide  area  in  Wisconsin  and 
Michigan.  To  the  north  and  west  are  the  Marquette  and  Gogebic 
ranges.  These  three  mining  areas  constitute  what  may  be  called  the 
"hard  ore"  producers,  because  the  ores  found  there  are  coarser 
and  much  harder  than  those  found  in  the  other  areas.  They  are 
generally  known  as  the  "Old  Ranges,"  since  they  were  dis- 
covered and  worked  first.  The  ore  from  these  ranges  is  shipped 
from  Escanaba,  Marquette,  and  Ashland,  respectively.  Mining 
operations  are  carried  out  mainly  by  underground  methods, 
although  there  was  some  "open  pit"  mining  until  recent  years. 

More  important  as  producers  at  the  present  time  than  the 
"Old  Ranges"  are  the  Mesaba,  Cuyana,  and  Vermillion  ranges, 
which  lie  to  the  west  and  northwest  of  Lake  Superior.  In  these 
latter  ranges  the  ores  are  of  a  fine,  and  more  or  less  loamy  texture. 
The  bulk  of  the  product  is  mined  in  open  pits,  and  the  ease  with 
which  a  vast  tonnage  is  obtained,  together  with  the  higher  grade  of 
most  of  the  ore  found  there,  has  made  these  the  most  important 
sources  of  supply.  Approximately  75%  of  the  ore  used  in  the 
Calumet  District  comes  from  these  more  recently  worked  ranges, 

41 


42  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [222 

90%  of  which  is  obtained  from  the  Mesaba  Range  alone.  The 
bulk  of  this  ore  is  shipped  from  Duluth,  Superior,  and  Two  Har- 
bors.^ 

The  Grading  and  Classification  of  Ores. — Ore  is  graded  accord- 
ing to  its  composition  and  structure.  The  qualities  especially- 
desired  are  a  high  iron  content,  and  a  low  percentage  of  phos- 
phorus and  of  water.  The  price  is  based  on  a  theoretical  ore 
which  has  a  definite  percentage  of  each  of  these  constituents.^ 
Ores  are  first  classified  into  Bessemer  or  Non-Bessemer;  the  former, 
if  they  contain  less  than  o.ooi%  of  phosphorus  per  i%  of  iron, 
the  latter,  if  they  contain  more  than  that  amount.  The  Bessemer 
ores  command  the  higher  price  because  they  are  the  purest  ores 
known.^  This  division  is  made  because  in  the  Bessemer  process  no 
phosphorus  can  be  eliminated.  Hence  the  pig  iron  from  which  the 
steel  is  made  must  have  no  more  phosphorus  than  will  maintain 
the  Bessemer  limits  of  o.i%  phosphorus  in  the  steel.*  Ores  are 
further  classified  by  source.  They  are  either  Mesaba  or  Old  Range. 
The  structure  of  the  two  types  of  ore  is  different,  and  each  acts  dif- 
ferently in  the  furnace.  Many  smelters  do  not  care  to  use  ioo%  Mes- 
aba, since,  owing  to  its  fine  texture,  it  is  apt  to  pack  down  in  the 
furnace  and  prevent  the  free  circulation  of  the  blast.  Gas  pockets 
sometimes  are  formed  which  are  liable  to  explode.  Consequently 
a  mixture  of  Mesaba  and  Old  Range  ores  is  used  in  many  mills 
in  order  to  increase  the  spaces  through  which  the  air  can  circulate. 
One  large  producer  in  the  Calumet  District  uses  85%  Mesaba  and 
15%  hard  ore  for  this  reason.   On  the  other  hand,  many  smelters 

1(a)   For  full  discussion  of  the  Lake    Superior  iron  ores,  see  Crowell  and 
Murray,  The  Iron  Ores  oj  Lake  Superior  (1923). 
(b)  For  movement  of  ore,  see  Fig.  II. 

''Popplewell,  F.,  Iron  and  Steel  Production  of  America,  p.  52. 
^Iron  Age,  April  10,  1924,  p.  11 00. 


Year 


1919. 
1920. 
1921. 
1922. 
1923. 
1924. 


Ore  Prices   1919-24 

Old    Range 

Mesaba 

Old  Range 

Mesaba 

Bessemer 

Bessemer 

Non-B. 

Non-B. 

per  ton 

$6.45 

$6.20 

$S.70 

$S-5S 

7.45 

7.20 

6.70 

6.55 

6.4s 

6.20 

S.70 

s-ss 

S-9S 

s-yo 

S.20 

5-05 

6.45 

6.20 

5.70 

S-SS 

S-6S 

5-40 

4.90 

4.75 

^Quarrie,  B.   D.,  "Operation  of  Blast  Furnaces,"  in  Iron  Ores  of  Lake 
Superior  (1923),  p.  118. 


223]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  43 

use  100%  Mesaba.  These  claim  that  if  a  hard  "chunky"  coke  is 
used  in  conjunction  with  hard  limestone,  there  is  no  irregularity  in 
the  operation  of  the  furnace.  Both  procedures  are  followed  in  the 
Calumet  District. 

In  recent  years,  there  has  been  a  very  marked  decrease  in  the 
proportion  of  Bessemer  ores  shipped.  In  1902,  59.9%  of  all  ore 
shipped  was  Bessemer,  but  in  1922  the  percentage  was  only  29.5. 
This  decrease  is  particularly  noticeable  in  the  movement  of  the 
Mesaba  ores,  where  the  amount  of  Bessemer  has  decreased  from 
80.7%  in  1902,  to  31.5%  in  1922.  This  decrease  is  not  only  rela- 
tive, but  actual,  for  the  total  movement  in  1922  was  the  lowest 
on  record.^  This  is  obvious  in  the  Calumet  District  where  the 
production  of  Open  Hearth  steel  has  increased  enormously  in  the 
past  decade,  while  that  of  Bessemer  has  decreased.'' 

The  successful  operation  of  a  blast  furnace  calls  for  an  ac- 
curate knowledge  of  the  ores  which  are  being  used.  They  must  be 
charged  into  the  furnace  with  the  proper  proportions  of  limestone 
and  coke  in  order  that  the  impurities  will  flux  properly  and  pro- 
duce the  desired  grade  of  iron.  The  proportions  of  fluxing  ma- 
terials and  fuel  vary  according  to  the  composition  of  the  ore. 
Therefore  the  ore  must  comply  with  its  specifications.  If  it  varies 
from  the  guaranteed  analysis,  the  furnace  manager  is  obliged  to 
make  troublesome  changes.  He  has  to  increase  or  decrease  the 
amounts  of  coke  or  limestone  in  the  charge,  raise  or  lower  the 
temperature  of  the  blast,  and  even  then  he  may  not  be  able  to  make 
the  desired  grade  of  pig  iron.  In  the  case  of  a  plant  devoted 
exclusively  to  pig  iron  this  would  be  a  serious  matter,  since  the 
iron  has  to  satisfy  rigid  chemical  analyses  to  fit  it  for  particular 
uses. 

The  average  iron  content  of  ore  shipped  from  the  Lake  Supe- 
rior Region  in  1922  and  1923  was  51.83%,  as  against  an  average 
of  51.42%  in  1914  and  191 5.  In  1902,  it  was  56.22%.  These 
figures  show  there  has  been  a  considerable  decrease  in  the  iron 
content  during  the  past  twenty  years.  The  lowest  level  was  reached 
in  1 91 6;  since  that  time  there  has  been  a  slight  increase.  There 
appear  to  be  three  factors  which  determine  the  average  grade  of 

'Crowell  and  Murray,  Iron  Ores  of  Lake  Superior  (1923),  pp.  80-81. 
*Ref.,  Table  V,  which  shows  the  production  of  steel  by  kinds  for  a  period 
of  years. 


44  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [224 

ore  mined  and  marketed,  (i)  During  periods  of  business  de- 
pression, iron  production  is  low  and  the  prices  of  ore  accordingly 
fall.  During  such  a  time,  only  high  grade  ore  is  used.  The  opposite 
is  true  for  boom  periods,  when  smelters  will  take  almost  any  ore 
they  can  get,  since  prices  are  high.  Consequently,  the  average 
grade  falls.  (2)  When  a  new  body  of  high  grade  ore  is  opened  up, 
the  effect  is  to  raise  for  a  time  the  average  grade  marketed.  In 
1893,  the  heavy  shipments  of  Mesaba  ore  raised  the  average  for 
that  year  to  the  highest  point  ever  reached,  61%.  (3)  In  general, 
the  best  and  most  accessible  ores  are  exploited  first.  Within  a  few 
years,  these  are  either  exhausted  or  cannot  longer  supply  the 
demand,  in  which  case  the  production  of  lower  grade  ores  is  con- 
sequently increased  and  the  average  grade  is  reduced.'^  The  general 
improvement  in  the  grade  which  has  been  noticeable  in  the  last 
few  years  is  due  largely  to  the  better  methods  of  marketing  the 
ore,  together  with  beneficiation,  mainly  washing,  which  is  being 
practised  on  an  increasing  scale  at  the  mines. 

Low  grade  ore  increases  the  costs  of  production.  If  the 
demand  for  iron  remains  about  the  same  as  at  present,  or  in- 
creases, this  in  turn  will  necessitate  a  considerably  increased 
consumption  of  ore,  limestone,  and  coke.  This  in  its  turn  will 
increase  labor  and  furnace  costs,  while  the  output  of  iron  and  steel 
per  day  will  be  decreased,  since  the  capacity  of  a  furnace  is  limited. 
Consequently,  the  prices  of  pig  iron  will  rise.  "A  decrease  of  5% 
in  the  iron  content  of  ore  involves  the  additional  use  of  about 
0.14  tons  of  ore,  0.12  tons  of  coke  and  0.36  tons  of  fluxing  stone 
per  ton  of  pig  iron  produced  .  .  .  which  at  present  prices 
would  mean  an  increase  in  raw  materials  alone  of  about  $1.25 
per  ton  of  pig  iron."^  The  ore  is  analyzed  immediately  it  arrives 
at  the  furnace  and  this  "natural  analysis"  forms  the  guide  in  cal- 
culating the  "burden"  for  a  blast  furnace.  The  "dry  analysis" 
made  at  the  mine  is  useless  for  this  purpose  since  the  ore  collects 
moisture  as  a  result  of  exposure  on  the  stock  piles.  This  "dry 
analysis"  gives,  however,  an  accurate  knowledge  of  the  chemical 
composition,  which  serves  as  the  guide  for  blending,  and  determin- 
ing the  quantities  of  coal  and  coke  necessary  for  the  reduction  of 
the  particular  mixture. 

'Eckel,  E.  C,  Iron  Ores,  pp.  358-361. 
^Ibid.,  p.  ^6:^. 


225]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  45 

The  question  of  the  grade  of  ore  is  vital  to  the  Calumet 
smelters  since  this  determines  the  amounts  of  fuel  and  limestone 
which  must  be  used,  in  the  costs  of  which  the  district  is  at  a  dis- 
advantage compared  with  Pittsburgh.  The  steel  companies  have 
acquired  properties  which  contain  large  reserves  of  high  grade  ore. 
The  possession  of  these  ores  ensures  them  an  adequate  supply  for 
many  years.  They  constitute  an  important  reason  for  the  amalga- 
mations which  have  taken  place,  and  which  are  probable  in  the 
future.  Consequently,  the  larger  corporations,  with  their  abundant 
reserves,  are  more  secure  than  the  smaller  companies,  which  pur- 
chase their  ore  on  the  open  market.  Ores  so  purchased  will  become 
increasingly  expensive  as  the  supplies  of  independently  owned 
reserves  approach  exhaustion. 

Mining  Operations. — Mining  operations  in  the  Lake  Superior 
region  are  among  the  more  highly  organized  industrial  activities 
in  the  country.  They  have  been  developed  to  cope  with  the  de- 
mands of  the  iron  and  steel  industry,  which  have  increased  so  rapid- 
ly in  the  last  few  decades.  The  size  of  the  operations,  the  enormous 
tonnage  produced,  the  comparatively  short  navigation  season 
of  about  seven  months,  and  the  needs  for  standardized  grades,  all 
have  combined  to  necessitate  a  high  degree  of  efficiency.  Large 
mining  corporations  predominate.  These  are  either  independents 
or  subsidiaries  of  the  steel  companies,  but  the  aims  and  problems 
of  each  are  the  same. 

Two  types  of  mining  operations  have  been  developed  to  suit 
the  particular  conditions  in  the  six  producing  fields.  The  hard 
ores  of  the  Old  Ranges  are  produced  mainly  by  deep  under-ground 
methods,  while  on  the  Mesaba,  Vermillion,  and  Cuyana  Ranges, 
the  bulk  of  the  ore  is  obtained  by  open  pit  methods.  Of  the  two, 
the  latter  is  by  far  the  most  productive  and  least  costly.  The 
soft  ores  of  these  ranges  can  be  excavated  with  steam  shovels  at  a 
very  low  cost  (Plate  i).  A  large  daily  output  is  readily  obtained, 
yet,  at  the  same  time,  production  is  very  elastic  and  can  be  adjusted 
easily  to  suit  the  conditions  of  the  market.  In  periods  of  depres- 
sion, operations  can  be  stopped  indefinitely  without  incurring  the 
excessive  charges  for  maintenance  that  obtain  in  underground 
mines.  Labor  costs  are  less,  since  fewer  skilled  men  are  required. 
Because  working  conditions  are  less  cramped,  mining  equipment 
can  be  of  the  largest  type.  This  facilitates  large  scale  production 
and  extensive  economies  in  operation.    The  choice  of  one  or  the 


46  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [226 

Other  of  these  methods  depends  upon  (i)  the  thickness  and  char- 
acter of  the  overburden,  (2)  the  size,  shape,  and  uniformity  of  the 
ore  body,  (3)  the  facilities  for  approaching  the  ore  by  open  cuts, 
(4)  the  availability  of  adequate  space  for  the  dumping  of  the  top 
burden,  and  (5)  the  amount  of  capital  which  is  available  for  strip- 
ping operations. 

Underground  methods  are  practised  systematically  where 
they  form  the  most  suitable  means  of  tapping  the  ore.  The  one- 
time wasteful  mining  operations  have  been  replaced  by  systematic 
exploitation  which  ensures  a  high  percentage  recovery  of  ore,  with 
a  minimum  of  risk  of  damage  from  cave-ins,  accidents,  and  flooding. 
The  standard  method  employed  is  to  sink  a  main  shaft  outside, 
but  near,  the  ore  body.  At  intervals  of  one  hundred  feet,  main 
drifts  are  opened  to  the  limit  of  the  ore,  or  to  the  boundary  of  the 
property.  From  these,  "raisers"  are  put  up  to  sub-levels.  Ore 
removal  starts  from  the  top  and  proceeds  downwards.  The  ore  is 
dumped  into  the  raisers  and  loaded  by  gravity  into  trucks  in  the 
main  drifts,  along  which  it  is  transported  by  trolleys  to  the  shaft. 
As  each  successive  level  is  worked  out,  the  roof  is  allowed  to  cave 
in.  This  method  ensures  a  high  recovery  of  ore  at  a  moderate 
cost.  These  operations  can  be  carried  on  all  the  year  round,  for 
the  ore  obtained  after  the  close  of  the  navigation  season  is  dumped 
in  stock  piles  ready  for  the  resumption  of  shipments  in  spring. 
Open  pit  mining,  in  contrast,  commonly  is  suspended  during  a 
part  of  the  winter  because  of  deep  snow  and  low  temperatures. 

The  movement  of  the  ore  to  the  docks  and  into  the  boats 
represents  a  triumph  of  organization  and  skill.  The  assembling 
of  such  a  vast  tonnage  of  ore  on  the  docks  is  no  simple  matter. 
Boats  of  varying  capacity  arrive  for  cargoes  of  definite  grades, 
which  must  be  strictly  up  to  specifications.  The  shippers  know 
approximately  when  a  vessel  is  due,  and  the  nature  of  its  next 
cargo.  They  aim  to  have  the  exact  quantity  and  quality  ready 
before  it  arrives,  so  that  loading  can  be  completed  without  any 
delay.  In  order  to  do  this,  the  docks  are  divided  into  "blocks," 
each  of  which  contains  a  definite  weight  of  a  particular  grade. 
The  organization  behind  all  this  extends  back  to  the  mines.  When 
the  ore  is  loaded  there,  samples  are  taken  representative  of  every 
ten  cars.  An  analysis  is  made  immediately  and  the  contents  of 
iron,  manganese,  silica,  and  phosphorus  checked.  The  numbers 
of  the  cars  containing  this  specific  consignment  are  recorded  after 


227]  LOCATION  OF  DISTRICT SOURCES   OF  RAW   MATERIAL  47 

the  train  is  made  up,  and  by  the  time  this  reaches  the  switching 
yard  adjacent  to  the  docks,  the  instructions  for  dealing  with  it  are 
issued.  At  the  docks,  every  cargo  which  is  to  be  made  up  has  been 
given  a  definite  block  number.  When  the  consignments  of  ore 
arrive,  they  are  accurately  weighed  and  the  necessary  quantities 
which  are  required  to  make  up  a  definite  mixture  are  dispatched 
to  the  different  blocks.  Should  any  of  the  latter  be  short  on  their 
particular  blend,  there  are  always  on  hand  reserves  of  "on  grade" 
ore  which  can  be  used  to  make  up  the  requirement.  If  any  block 
contains  a  surplus,  then  what  remains  is  renumbered  and  used  later 
to  make  up  a  new  cargo,  care  being  taken  that  the  average  grade 
for  the  whole  block  analyzes  to  the  new  specifications. 

During  the  navigation  season,  the  ore  trains  arrive  on  the 
docks  at  half  hour  intervals,  and,  consequently,  the  whole  oper- 
ations are  carried  out  with  remarkable  rapidity  as  well  as  accuracy. 
Eleven  railroad  companies  serve  the  ore  docks,  most  of  which  they 
own.  In  addition  to  hauling  the  heavy  tonnage  of  ore,  they  are 
responsible  to  the  mining  companies  for  making  and  maintaining 
certain  ore  grades  which  have  a  rigid  analysis.  The  railroads  are 
expected  to  handle  the  ore  promptly,  and  to  load  it  into  the  holds 
of  lake  freighters,  each  of  which  carries  5,000  to  14,000  tons.^ 

Ore  Handling  at  Upper  Lake  Ports. — The  ore  docks  are  as 
highly  specialized  as  the  freighters,  and  since  1862,  when  the 
"spout"  loading  system  was  first  installed  at  Marquette,  they  have 
developed  both  in  size  and  efficiency  in  keeping  with  the  improve- 
ment and  specialization  of  the  lake  boats.  The  old  wheel-barrow 
method  of  loading  was  far  too  slow  and  expensive,  and  it  gave 
way  to  the  more  rapid,  and  cheaper,  gravity  system. 

At  first,  and  this  still  holds  good  at  some  of  the  shipping 
points,  the  docks  were  built  of  timber.  In  recent  years,  however, 
steel  and  concrete  have  been  employed  more  and  more  in  their 
construction.  Apart  from  being  stronger,  these  materials  obviate 
the  fire  hazard.  With  the  increasing  size  of  boats,  the  docks  have 
been  built  higher  and  higher  so  that  loading  could  continue  to 
function  entirely  by  gravity.  Formerly,  the  bases  of  the  pockets 
were  barely  twenty  feet  above  the  water,  but  now  they  average 
more  than  forty  feet.    All  of  the  docks  have  developed  consider- 

'Barneveld,  C.  E.  van,  Iron  Mining  in  Minnesota,  p.  208. 


48  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [228 

able  storage  capacity,  owing  to  the  increase  in  the  number  of 
pockets. 

The  saving,  both  of  time  and  of  costs,  as  a  result  of  this  effi- 
cient organization,  is  considerable.  In  1909,  the  L.S."W.  E.Cory" 
loaded  10,111  gross  tons  of  ore  at  Two  Harbors  in  39  minutes. 
In  1 911,  the  same  vessel  loaded  9,457  tons  in  15  minutes  at  Allouez 
Dock,  Superior.  Such  rapidity  of  loading  enables  each  ship  to  in- 
crease the  number  of  voyages  it  can  make  in  a  season  and  thereby 
to  Increase  its  earning  capacity.^" 

The  cost  of  assembling  the  ore  at  these  docks  varies  according 
to  the  rail  haul  and  the  dock  charge.  The  latter  is  10  cents  at 
Marquette,  Escanaba,  and  Ashland,  but  is  only  5  cents  at  Superior, 
Duluth,  and  Two  Harbors.  The  rail  freights  from  the  Marquette 
Range  to  Marquette  average  63  cents  per  ton,  and  to  Escanaba, 
81  cents;  from  the  Menominee  Range  to  Escanaba,  81  cents;  from 
the  Gogebic  Range  to  Ashland,  81  cents;  from  Mesaba  and  Guyana 
Ranges  to  Superior,  Duluth,  and  Two  Harbors,  86  cents;  from  the 
Vermillion  Range  to  Two  Harbors,  86  cents.  Lake  transportation 
costs  are  the  same  to  all  Lower  Lake  ports,  with  the  exception  of 
those  from  Escanaba  to  the  Calumet  ports,  which  are  slightly 
less  than  to  Erie  ports.  These  vary  according  to  the  port  of  origin 
from  65  cents  to  83  cents  per  ton.  The  average  unloading  cost  is 
10  cents  per  ton.^^ 

Reserves  0/  0}r. — Since  the  Calumet  District  is  entirely  de- 
pendent upon  the  iron  ores  of  the  Lake  Superior  region,  the  ques- 
tion of  reserves  there  is  of  vital  interest  to  its  steel  producers. 

Various  computations  have  been  made,  varying  from  that  of 
Hayes  in  1908,  who  put  the  total  amount  of  merchantable  ore  at 
3,510,000,000  tons,  to  that  of  the  Michigan  Tax  Commission, 
in  1909,  of  1,584,000,000  tons.  The  first  is  probably  an  over- 
estimate while  the  latter  seems  an  underestimate,  considering  the 
purpose  for  which  it  was  made.  Eckel  suggests  that  the  probable 
reserves  amount  to  about  2,500,000,000  tons,  and  certainly  to 
more  than  2,000,000,000  tons.^^  From  these  figures  it  would  seem 
that  the  Calumet  District,  and  the  other  iron  and  steel  districts 

"Backert,  A.  O.,  J.  B.  C.  of  Iron  and  Steel,  p.  44. 

"Crowell  and  Murray,  Iron  Ores  oj  Lake  Superior  (1923),  pp.  91-93. 

^^Eckel,  E.  C,  Iron  Ores,  pp.  384-89. 


229]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  49 

as  well,  are  assured  of  adequate  supplies  for  many  years  to  come. 
The  problem  arises,  however,  as  to  how  much  of  this  reserve  is 
worth  mining  under  present  conditions.  According  to  R.  C.  Allen 
(State  Geologist  of  Michigan),  in  a  paper  read  before  the  x'\merican 
Institute  of  Mining  and  Metallurgical  Engineers  and  the  Cleve- 
land Engineering  Society,  much  of  this  so-called  reserve  is  not 
iron  ore  at  all,  because  according  to  his  definition  "Iron  ore  is 
rock  which  can  be  moved  from  its  natural  position  in  the  earth  and 
used  in  the  manufacture  of  iron  with  profit."  He  states  that  it 
would  be  unlikely  that  mining  operations  would  be  carried  on  in 
the  Superior  region  after  all  the  ore  above  35%  iron  content  had 
been  removed,  because  the  movement  to  the  present  smelting 
areas  would  not  be  worth  while,  from  the  point  of  view  of  iron 
produced  in  proportion  to  slag.  He  is  of  the  opinion  that  the  min- 
ing industry  will  migrate  back  to  the  East,  where  higher  grades  of 
ore  than  40%  are  known  to  exist.  If  he  is  right,  then  the  life  of  the 
iron  and  steel  industries  of  the  Calumet  District  depends  upon  the 
reserves  of  Lake  Superior  ore  of  a  higher  grade  than  35%."  One 
thing  is  certain,  and  that  is  the  total  dependency  of  the  Calumet 
District  upon  the  Lake  Superior  iron  ores.  Furthermore,  anything 
which  increases  the  cost  of  smelting,  will  affect  this  area  adversely. 
The  better  the  grade  of  ore,  and  the  greater  the  production  per  ton 
of  ore  used,  the  more  easily  can  this  district  compete  with  other 
districts  which  have  local  supplies  of  fuel. 

Lake  Transportation  Facilities. — Cheap  transportation  on  the 
Great  Lakes  has  been  one  of  the  more  important  factors  in  the 
development  of  the  iron  and  steel  industry  of  the  United  States, 
and  particularly  of  the  Calumet  District.  It  is  doubtful  if  the 
industry  would  exist  at  all  in  the  Northern  Interior  if  the  Lakes 
were  not  there.  It  would  be  impracticable  to  assemble  the  Superior 
iron  ore  at  the  various  smelting  centers  in  any  other  way.  No  one 
railroad,  however  well  organized,  could  possibly  handle  it.  The 
lake  freighter  has  been  evolved  to  cope  with  this  bulk  traffic. 

Owing  to  climatic  conditions  the  navigation  season  on  the 
lakes  is  restricted,  as  already  noted,  to  a  little  more  than 
seven  months,  during  which  time  the  steel  mills  must  receive  a 
supply  of  ore  for  twelve  months.  Failing  this,  they  would  either 
have  to  close  down  during  part  of  the  winter  or  obtain  additional 

"Crowell  and  Murray,  op.  cit.,  (1923),  pp.  108-10. 


50  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [23O 

supplies  by  rail.  Consequently,  by  December  ist  the  seasonal 
movement  must  be  complete.  This  date  is  fixed  quite  as  much  by 
the  insurance  companies  as  by  the  weather  conditions,  since 
thereafter,  the  risks  are  too  great  to  be  assumed  at  normal  rates 
by  the  insurance  companies.  Under  favorable  weather  conditions 
special  policies  are  issued  for  a  period  of  about  two  weeks  at  double 
the  ordinary  rates. 

As  a  result  of  these  limitations  to  navigation,  it  has  been 
advantageous  to  devise  boats  and  handling  facilities  which  will 
expedite  to  the  utmost  the  movement  of  the  ore.  The  modern 
lake  freighters  are  designed  to  carry  bulk  cargoes  only.  They  are 
nothing  more  than  great  steel  boxes.  They  are  unlike  most  ocean 
vessels,  in  that  the  engines  are  placed  aft  instead  of  amidships, 
while  the  navigating  bridge  is  forward.  There  is  only  one  deck, 
and  all  the  cargo  is  stowed  in  one  long  hold  which  extends  the 
whole  length  of  the  boat  between  the  engines  and  the  bridge. 
The  majority  of  the  vessels  which  have  been  built  since  1905  have 
been  from  524  to  600  feet  long  with  an  average  cargo  capacity  of 
10,000  tons  (Plate  2).  Although  the  size  of  these  boats  has  been 
increased  enormously  of  late  years,  their  engine  units  have  re- 
mained small.  Compared  with  many  steamers  they  are  very  low 
powered,  but  their  small  coal  consumption — an  average  of  55/100 
ounces  of  coal  per  ton  mile  of  cargo  carried — makes  them  very 
economical  to  run,  and  freight  charges,  consequently,  are  kept 
low.  The  most  modern  types  are  600  feet  long,  with  a  beam  of 
60  feet,  and  32  feet  depth  of  hold.  These  have  a  rated  carrying 
capacity  of  12,000  tons,  but  they  actually  carry  as  much  as  14,000 
tons  on  a  draft  of  21  feet.^*  A  number  of  larger  ore  vessels  exist, 
as  for  example  the  L.S.  "W.  Grant  Mordan,"  which  is  625  feet 
long,  59  feet  breadth  of  beam,  and  33  feet  depth  of  hold,  with  a 
a  rated  carrying  capacity  of  14,000  tons.^'  There  probably  are  no 
more  efficient  bulk  carriers  in  the  world,  and  it  is  recognized  that 
the  "600-30-32"  class  is  the  most  efficient  type  of  ore  and  coal 
carrier  that  exists. ^^ 

The  design  and  size  of  the  boats  have  been  influenced  by  two 
factors,  the  depth  of  the  channels  between  the  Lakes  and  the 
methods  adopted  in  loading  and  unloading  ore. 

^^International  Shipmasters  Association  Directory,  1923. 

^^Mining  and  Metallurgy,  Nov.,  1921,  p.  il. 

"Lake  Carriers  Association,  Annual  Report  (1922),  p.  116. 


231] 


LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL 


51 


These  vessels  have  no  fixed  routes.  They  are  employed  in  all 
the  Great  Lakes  with  the  exception  of  Ontario.  Consequently, 
their  size  is  limited  by  the  capacity  of  the  Soo  Canals,  and  of  the 
St.  Mary  and  St.  Clair  rivers.  With  each  successive  deepening 
of  these  critical  waterways,  the  size  of  the  boats  was  increased 
accordingly.  It  is  interesting  to  note  that  the  first  consignment 
of  ore  to  Lake  Erie  in  1853,  152  tons,  was  portaged  around  the 
rapids  of  the  Soo,  while  the  first  shipment  through  the  Soo  Canal 
in  1855  was  132  tons.  It  was  not  until  1884  that  there  was  a  16 
foot  channel  throughout.  The  increased  cargoes  which  could  be 
carried  so  cheapened  the  costs  of  transportation,  that,  in  1884, 
freight  rates  were  only  $1.21  per  ton,  compared  with  $4.14  per  ton 
in  1866.  Meanwhile,  boats  had  increased  in  size  from  600  tons  to 
1900  tons.^^  The  demand  for  greater  depth  in  order  to  permit  the 
use  of  larger  vessels  induced  the  Federal  Government  to  rebuild 
the  old  1885  locks  at  the  Soo.  The  new  structure,  the  Poe  Lock, 
provided  20  feet  draft,  and  at  the  same  time,  1896,  the  channel 
through  the  St.  Mary  River  was  improved  and  shortened  by  11 
miles,  and  provision  was  made  for  the  first  time  for  night  naviga- 
tion,^^ 

In  1895,  the  construction  of  the  steamers  was  modified 
to  suit  the  construction  of  the  ore  docks,  which  were  designed 
to  load  ore  by  gravity  through  spouts  from  hoppers.  These 
spouts  were  placed  at  intervals  of  12  feet  (Plate  3).  In  the  new 
steamers,  the  hold  was  made  accessible  through  a  large  number 
of  hatches  which  opened  on  to  the  deck.  These  were  placed  24 
feet  apart  "from  center  to  center  fore  and  aft."  It  was  soon  seen 
that  these  hatches  did  not  utilize  the  loading  capacity  of  a  dock 
to  the  best  advantage,  since  only  alternate  spouts  could  be  used 
at  one  time,  and  the  boat  had  to  be  moved  12  feet  in  order  to  use 
the  others.  Consequently,  in  1902,  the  first  boat  appeared  with  its 
hatches  spaced  the  same  distance  apart  as  the  spouts.  As  a  result 
of  this  change,  loading  operations  could  be  completed  in  less  than 
half  the  time  previously  taken,  since  all  the  spouts  throughout  the 
length  of  the  boat  could  be  used  at  one  time  without  moving  the 
boat.  This  also  effected  a  considerable  saving  in  costs.  This  first 
boat  of  the  newer  type  loaded  her  first  cargo  of  5,250  tons  in  30^ 
minutes.    Since  that  time  all  the  new  boats  have  been  constructed 

I'Crowell  and  Murray,  Iron  Ores  of  Lake  Superior  (1923),  p.  91. 
isBackert,  A.  O.,  The  A.  B.  C.  of  Iron  and  Steel,  p.  44. 


.v<:^ 


.v^^'^^ 


52  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [232 

to  provide  similar  accessibility.  The  time  spent  in  loading  has 
been  steadily  reduced.  The  L.S."W.  E.  Cory"  loaded  io,iii  tons 
gross  in  39  minutes  at  Two  Harbors  in  1909.'^  This  change  in  deck 
structure  necessitated  modifications  in  the  construction  of  the 
hold  in  order  to  eliminate  certain  obstructions  which  particularly 
affected  unloading  operations.  The  reduction  in  the  time  taken  to 
load,  together  with  that  saved  in  unloading,  enabled  a  boat  to 
make  several  more  trips  per  season — a  distinct  advantage  in  any 
transportation  organization,  and  especially  important  on  the 
Great  Lakes,  with  their  relatively  short  navigation  season. 

As  a  result  of  these  improvements,  freight  rates  have  steadily 
decreased,  and,  in  1922,  they  averaged  90  cents  per  ton. 2°  The 
difference  in  costs  between  boat  and  rail  transportation  is  very 
considerable.  This  is  true  in  all  commercial  movements  on  the 
Great  Lakes  and  the  oceans,  but  it  is  particularly  significant  in 
the  case  of  the  movement  of  bulk  commodities  on  the  Lakes. 
"There  is  no  doubt  that  the  Lake  freighters  provide  the  cheapest 
means  of  transportation  in  the  world.  Their  charge  per  ton  mile  is 
0.07  cents,  as  compared  with  one  cent  by  rail.  Economical  and 
efBcient  transportation  lies  at  the  foundation  of  industrial  develop- 
ment. .  .  .  The  bringing  together  of  the  cheap  coal  of 
Pennsylvania  and  the  cheap  rich  iron  of  the  Mesaba  range  has  been 
made  commercially  practicable  by  the  cheapness  of  water  trans- 
portation."^^ 

The  carrying  trade  on  the  lakes  is  chiefly  in  the  hands  of 
large  corporations  who  controlled  60%  of  the  total  number  of 
ships,  but  96.3%  of  the  tonnage,  in  1916.  These  figures  show  that 
they  also  own  and  operate  the  larger  vessels. -^  Ownership  by  in- 
dividuals and  by  small  independent  companies  began  to  decline 
after  1907,  when  the  Rockefeller  interests  put  a  fleet  of  twelve 
vessels  into  operation.  At  the  present  time,  the  United  States 
Steel  Corporation,  through  its  subsidiary,  the  Pittsburgh  Steam- 
ship Company,  controls  a  large  fleet,  but  these  form  only  a  part  of 
the  number  necessary  to  handle  60,000,000  tons  of  ore  in  seven 

"Backert,  A.  O.,  op.  cit.,  pp.  44-47' 

'^"Crowell  and  Murray,  Iron  Ores  oj  Lake  Superior  (1923),  p.  91. 
"(a)   Mining  and  Metallurgy,  November,  1921,  p.  13. 
(b)   West  Virginia   and  eastern   Kentucky  supply  most  of  the  coking 
coal  which  is  used  in  the  Calumet  District. 
^'^Dept.  of  Commerce  Report,  191 6. 


233]  LOCATION  OF  DISTRICT SOURCES  OF  RAW  MATERIAL  53 

months,  not  to  mention  the  grain,  coal,  and  limestone  traffic. 
In  the  spring  it  is  customary  for  the  iron  and  steel  companies  to 
contract  for  the  conveyance  of  a  given  quantity  of  ore  which  they 
will  need  for  the  ensuing  year  in  excess  of  what  their  own  boats 
can  carry.  In  1923,  the  rate  averaged  80  cents  per  ton  from  the 
Upper  Lake  ports  to  all  those  on  the  lower  lakes.  These  contract 
rates  vary  slightly  from  year  to  year,  and  the  grain  movement 
competes  with  that  of  iron  ore.  Should  any  smelter  need  tonnage 
in  excess  of  that  for  which  he  has  contracted,  he  must  enter  the 
open  market  and  take  what  he  can  get  at  the  prevailing  rate.  This 
"Wild  Rate"  may  be  higher  or  lower  than  his  contract  rate  was, 
according  to  the  supply  of  shipping  available  at  the  time. 

Facilities  at  Calumet  Ports  for  the  Reception  of  Ore. — The 
use  of  these  lake-shipping  facilities  already  noted  is  dependent 
upon  the  availability  of  adequate  harbors  for  the  reception  of 
water-borne  materials.  In  every  instance  the  provision  of  these 
facilities  in  the  Calumet  District  has  been  initiated,  if  not  entirely 
provided,  by  the  steel  interests  themselves,  since  prior  to  1880 
there  were  very  meager  harbor  facilities  there.  The  improvement 
of  the  mouth  of  the  Calumet  River  and  the  construction  of  an  outer 
harbor  were  followed  immediately  by  the  deepening  and  straighten- 
ing of  the  river  itself  (Plate  4).  The  three  improvements  were 
undertaken  with  the  aim  of  making  the  industrial  sites  adjacent 
to  the  river  accessible  to  lake  steamers.  Eastward  from  Calumet 
Harbor  stretched  a  desolate,  dune  fringed  shore  devoid  of  any  form 
of  harbor.  It  was  not  until  1901  that  any  project  was  conceived 
for  the  construction  of  Indiana  Harbor  and  this  was  not  completed 
until  1906.   The  harbor  at  Gary  was  constructed  soon  afterwards. 

This  harbor  development  was  made  relatively  simple  by  the 
nature  of  the  shore.  The  shallow  water  facilitated  the  building  of 
piers  and  breakwaters.  The  loose  sand  and  glacial  till,  which 
covers  most  of  the  area,  made  excavation  easy.  The  necessary 
material  for  filling  could  be  sucked  up  from  the  lake  floor  with 
relative  ease.  The  Calumet  River  formed  the  natural  place  to 
begin  operations,  since,  as  already  noted,  the  pioneer  plant 
was  located  there,  and  the  river  and  its  mouth  formed  the  nucleus 
of  a  harbor.  Hence  harbor  construction  in  the  Calumet  District 
began  with  the  deepening  of  the  mouth  of  the  river  and  the  im- 
provement of  the  only  waterway  which  led  inland.    It  was  the 


54  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [234 

urgent  need  for  facilities  to  receive  the  lake  boats  bringing  ore  to 
the  steel  mills  which  was  responsible  for  the  initial  steps,  while  the 
need  for  additional  furnace  sites  called  for  the  harbor  improvements 
which  were  undertaken  at  Gary  and  Indiana  Harbor. 

Through  these  three  ports  pass  all  the  iron  ore,  most  of  the 
limestone,  and  much  of  the  coal,  consumed  by  the  Calumet  fur- 
naces. 

At  present  Calumet  Harbor  is  the  most  important  of  the 
three  since  it  handles  the  largest  share  of  the  total  trade.  Origin- 
ally, there  was  no  outer  harbor  there.  Moreover,  only  very 
small  boats  could  enter  the  river,  since  its  mouth  was  blocked  by  a 
long  sand  spit  which  had  been  built  by  the  littoral  lake  currents, 
winds,  and  deposition  by  the  river  itself.  This  spit  had  forced  the 
river  to  make  a  sharp  bend  just  before  reaching  the  lake,  and  to  run 
parallel  to  the  shore  for  about  3200  feet.  The  channel  across  the 
bar  at  the  mouth  of  the  deflected  river  averaged  100  feet  in  width, 
but  its  depth,  always  inadequate,  varied  according  to  the  season. 
In  spring  when  the  river  was  swollen  from  rains  it  was  able  to 
scour  a  slightly  deeper  channel,  the  depth  of  which  ranged  from 
two  feet  to  four  feet.  Inside  the  bar,  there  was  a  depth  of  thirteen 
feet  for  a  distance  of  four  miles  upstream.  In  the  1870's  a  channel 
was  dredged  across  the  base  of  the  spit  that  permitted  the  lake 
boats  of  that  period  to  enter  the  river  and  to  serve  the  early  iron 
and  steel  plants  which  were  established  along  the  lower  banks  in 
the  i88o's.  Since  1884,  dredging  has  kept  pace  with  the  increasing 
size  of  the  lake  freighters.^^  The  outer  harbor,  and  the  improved 
river  channel,  five  miles  in  length,  constitute  one  extended  harbor 
which  is  accessible  to  the  largest  lake  freighters  at  all  times  during 
the  navigation  season.  The  outer  harbor,  completed  in  191 1,  covers 
half  a  square  mile,  and  is  simply  the  dredged  portion  of  the  lake 
which  is  enclosed  by  the  piers  and  the  breakwater.  It  protects 
the  entrance  to  the  river,  as  well  as  the  north  slip,  which  the  Illi- 
nois Steel  Company  constructed  to  permit  ore  boats  to  discharge 
directly  on  to  its  store  piles.  The  outlet  is  on  the  down-lake  side 
in  order  to  prevent  it  from  being  silted  up  by  the  action  of  the  lake 
currents  from  the  north-northwest.  The  river  has  been  dredged 
for  a  distance  of  five  miles  to  a  depth  of  22  feet.  Except  in  the 
rock  section  located  between  iii  th  and  1 14th  Streets,  this  dredging 

^^Survey  oj the  Northern  and  Western  Lakes,  Bull.  No.  31  (1922),  pp.  205-6. 


235]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  55 

was  a  simple  matter,  since  elsewhere  the  river  bottom  was  mud  and 
silt.  In  the  rock  section,  where  bedrock  was  encountered  at  about 
eighteen  feet,  the  requisite  depth  was  obtained  by  blasting.  The 
navigable  channel  averages  200  feet  in  width,  but  there  are  con- 
siderable variations.  North  of  the  Elgin  Joliet  and  Eastern  Rail- 
road bridge,  it  is  300  feet  wide.  In  the  neighborhood  of  the  Federal 
Furnace  plant,  it  is  only  60  feet  across.  Beyond  the  Interstate 
Iron  and  Steel  plant,  the  channel  decreases  in  depth  rapidly  and 
becomes  narrower.  The  bulk  of  the  traffic,  however,  is  to  be  found 
below  the  Interstate  Iron  and  Steel  plant,  where,  as  already  noted, 
the  channel  has  a  depth  of  22  feet. 

No  trouble  is  experienced  in  bringing  in  even  the  largest  lake 
steamers  under  their  own  power,  and  the  arrival  of  14,000- ton 
cargoes  of  coal  and  ore  is  not  an  uncommon  occurrence.  Some 
captains,  however,  prefer  to  utilize  the  tug  service  in  order  tO' 
avoid  any  chance  of  running  aground.  In  order  to  permit  the 
larger  ships  to  turn  around  there  are  three  turning  basins  of  ample 
size.^* 

Nine  slips  have  been  constructed  on  the  west  side  of  the 
river  to  provide  dock  space  for  the  industrial  plants  which  are 
located  there,  a  number  of  which  are  engaged  in  manufacturing 
iron  and  steel.  These  slips  are  by  no  means  fully  utilized,  as  much 
land  along  the  river  front  remains  undeveloped.  Some  of  this  is 
held  by  land  companies,  or  by  individuals  for  speculative  purposes. 
Some  of  it  is  held  by  industrials  themselves  to  provide  for  their 
own  future  expansion.  Much  of  it  has  been  so  subdivided  among 
a  number  of  owners  that  doubtless  it  will  become  increasingly  diffi- 
cult to  obtain  large  industrial  sites  there  in  the  future.  This  may 
have  a  retarding  effect  on  the  progress  of  the  district. 

Free  navigation  on  the  river  is  not  impeded  by  many  bridges. 
Street  traffic  in  this  industrial  section  is  not  very  great  when  com- 
pared with  that  of  central  Chicago.  Consequently,  three  bridges 
handle  it  with  apparent  ease,  as  compared  with  twenty-one  on 
the  Chicago  River  system.  Four  railroads  cross  the  Calumet 
River  in  its  lower  course,  but  river  navigation  has  the  right  of  way 
at  all  times.  The  only  apparent  drawback  results  from  the  loca- 
tion of  three  of  these  railroad  bridges  in  close  proximity  one  to 
another.    All  have  narrow  draw  openings  and  the  lack  of  more 

^^Survey  oj  the  Northern  and  Western  Lakes,  Bull.  No.  31  (1922),  pp.  206-7. 


56  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [236 

space  renders  it  somewhat  difficult  to  handle  the  large  freighters 
in  the  most  used  part  of  the  river,-^ 

But  for  these  Calumet  River  improvements  there  could  not 
have  been  any  development  of  upstream  steel  plants,  for  modern 
lake  carriers  could  not  have  reached  them.  As  it  is,  these  plants 
have  been  able  to  compete  on  favorable  terms  with  those  located 
at  the  mouth  of  the  river  or  along  the  shore,  and  "Their  develop- 
ment has  kept  pace  with  the  progressive  deepening  of  the  river."^^ 

The  utilization  of  the  lake  front  for  industrial  and  commercial 
purposes  is  encouraged  by  the  laws  of  Indiana."  This  has  been, 
therefore,  an  incentive  for  the  construction  of  harbors  along  that 
shore,  eastwards  from  South  Chicago.  Two  have  been  con- 
structed already,  and  at  least  two  others  are  probable.  The 
Buffington  Portland  Cement  Company  is  planning  one  at  its 
present  site,  and  the  Inland  Steel  Company  probably  will  con- 
struct one  when  it  develops  its  property  east  of  the  Gary  Sheet 
and  Tube  Mills. 

When  the  Inland  Steel  Company  decided  to  locate  in  this 
district  the  considerations  which  led  to  the  choice  of  the  actual 
site  were  proximity  to  Chicago,  at  a  point  where  either  a  deep 
water  harbor  existed,  or  where  such  a  harbor  could  be  constructed 
easily.  The  only  suitable  sites  around  Calumet  Harbor  already 
were  occupied,  and  the  remaining  shore  in  Cook  County,  east  of 
South  Chicago,  had  been  either  subdivided  or  dedicated  to  park 
purposes,  and  location  there  accordingly  was  impossible.-*  Con- 
sequently, the  problem  resolved  itself  into  one  of  providing  an 
artificial  harbor  somewhere  along  the  Lake  County  shore  of  Indi- 
ana. The  nearest  available  site  to  Chicago  was  found  where 
Indiana  Harbor  is  now.  Accordingly,  in  1901,  the  project  was 
launched,  and  private  funds  were  utilized  to  construct  the  harbor 
in  1906. 

As  first  constructed,  the  channel  (17  feet  deep)  which  con- 
stituted the  outer  harbor,  was  enclosed  by  wharves  and  piers 

^U.  S.  Engineer's  Report,  "Chicago  and  Adjacent  Waterways"  (1913). 
p.  123. 

^^House  Doc.  234,  63rd  Congress,  ist  Session  (1913),  p.  29. 
^''House  Doc.  2jy,  63rd  Congress,  1st  Session  (1913),  p.  30. 
^^House  Doc.  2jj,  he.  cit. 


237]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  5/ 

300  feet  apart,  which  extended  in  a  northeasterly  direction  from 
the  first  railroad  bridge,  about  550  feet  inside  the  earlier  shore 
line.  The  piers  were  made  to  converge  towards  the  lake  so  that  the 
entrance  was  only  140  feet  wide.  The  construction  of  this  channel, 
like  the  dredging  of  the  Calumet  River,  was  easy,  since  it  also  was 
excavated  in  loose  sand  and  glacial  material,  and  the  spoils  were 
utilized  for  filling  purposes  on  either  side.  In  order  to  make  this 
harbor  accessible  from  the  lake  with  a  minimum  amount  of  dredg- 
ing, a  channel  was  made  across  the  eastern  end  of  the  Indiana 
Shoal  which,  at  this  point,  extends  parallel  to  the  shore. -^  The 
development  of  the  surrounding  area  soon  led  to  the  demand  for  a 
public  harbor  at  this  point.  Since  private  funds  had  been  utilized 
to  construct  Indiana  Harbor,  it  could  only  be  used  by  its  owners, 
the  Inland  Steel  Company.  With  the  growth  of  the  oil  industry 
at  Whiting,  and  the  need  for  public  harbor  facilities,  the  Federal 
Government  was  persuaded  to  take  over  the  original  harbor  in 
1 910.    Considerable  improvements  were  then  inaugurated.^" 

In  191 5,  a  breakwater  was  commenced  in  order  to  protect 
the  entrance,  and  to  m.ake  it  accessible  in  all  weathers.  This  was 
completed  in  1921.  In  191 6,  the  original  harbor  channel  was 
extended  lakewards  between  two  areas  of  "potential  fill."  This 
lengthened  the  harbor  channel  to  3,200  feet.  Part  of  the  material 
which  was  excavated  in  the  course  of  these  dredging  operations 
was  used  to  form  the  nucleus  of  the  present  sites  of  the  main 
plants  of  both  the  Inland  Steel  Company  and  the  Youngstown 
Sheet  and  Tube  Company.  Only  sufficient  filling  was  done,  how- 
ever, to  permit  the  erection  of  a  blast  furnace  on  each  side.  The 
remainder  of  the  area  has  since  been  utilized  as  a  dumping  place 
for  the  slag  produced,  thus  serving  a  double  purpose.  Land  build- 
ing has  been  associated  with  waste  disposal  in  a  very  advantageous 
manner.^^  The  present  channel  is  350  feet  wide  throughout  its 
length,  and  has  been  deepened  to  22  feet,  thus  making  it  possible 
to  receive  the  largest  lake  freighters  with  ease.  On  either  side  of 
this  channel  are  the  steel  plants,  and  both  have  their  ore  docks 
alongside.  There  is  sufficient  space  in  the  channel  to  carry  out 
unloading  operations  on  both  sides  simultaneously,  and  yet  leave 

^^Survey  of  Northern  and  Western  Lakes,  Bull.  No.  31  (1922),  p.  210, 
'"[/.  S.  Army  Engineer's  Annual  Reports. 
'^Iron  Age,  Jan.  16,  1908,  pp.  207-8. 


58  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [238 

abundant  room  for  other  vessels  to  pass.  Boats  can  enter  and  leave 
without  the  assistance  of  tugs. 

The  harbor  channel  is  continued  under  the  railroad  bridges 
to  the  Inner  Harbor,  or  what  is  generally  called  the  Indiana 
Harbor  Canal.  This  has  a  minimum  depth,  where  completed,  of 
20  feet.  It  extends  southwards  for  one  and  one-third  miles,  where 
a  branch  leads  off  towards  Wolf  Lake  (Fig.  i).  The  main  channel 
continues  southwards  to  the  Grand  Calumet  River  two  and  one- 
half  miles  east  of  Hammond.  When  it  is  completed  this  canal 
will  be  200  feet  wide  and  20  feet  deep  throughout  its  entire  length. 
It  is  on  the  western  arm  of  this  canal  that  Jones  and  Laughlin 
propose  to  build  their  new  steel  plant.  The  Government  only 
maintains  those  parts  which  have  been  completed  to  standard 
width  and  depth  (200' x  20').^^  Dredging  operations  are  now  in 
progress  west  of  Forsyth  Avenue  Bridge  in  that  section  to  be 
occupied  by  Jones  and  Laughlin. 

The  Indiana  Harbor  Canal,  when  It  is  finished,  will  Increase 
the  area  which  will  be  accessible  to  lake  freighters,  and  thereby 
increase  the  acreage  of  land  which  will  be  suitable  for,  and  avail- 
able for,  the  establishment  of  iron  and  steel  mills.  Sites  in  this 
area  will  have  an  advantage  over  those  along  the  Calumet  River 
in  that  canal  navigation  will  be  simpler  than  river  navigation, 
owing  to  the  fact  that  there  Is  only  one  bend  In  the  canal. 

Gary  harbor  Is  privately  owned  as  It  was  built  by  the  United 
States  Steel  Corporation,  through  the  medium  of  the  Indiana 
Steel  Company,  In  order  to  serve  the  steel  plant  which  was  built 
around  it.  Like  Indiana  Harbor  it  Is  a  slip,  excavated  In  the 
sandy  shore  (Plate  5).  Prior  to  the  building  of  this  harbor,  and  the 
subsequent  industrial  and  urban  development  nearby,  this  site  was 
a  wilderness  of  sand  dunes  and  swamps.  Construction  of  the 
harbor  took  place  in  1906.  It  Is  enclosed  by  two  piers,  250  feet 
apart,  which  extend  2,000  feet  out  Into  the  lake.  It  is  continued 
inland  from  the  shoreline  of  1906  for  a  distance  of  3563  feet  by  a 
slip  which  terminates  in  a  turning  basin,  located  within  300  feet 
of  the  Grand  Calumet  Rlver.^'   Boats  originally  entered  the  canal 

^^Survey  of  Northern  and  Western  Lakes,  Bull.  No.  31  (1922),  pp.  210-12. 
^^(a)  House  Doc,  237,  63rd  Congress,  ist  Session,  p.  122. 
(b)    U.  S.  Army  Engineer  s  Annual  Reports. 


239]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   IMATERIAL  59 

slip  direct  from  the  lake,  but,  in  stormy  weather,  this  was  dangerous. 
Hence,  in  1911,  a  breakwater  was  constructed  to  protect  it  from 
northeasterly  gales.^^  The  Gary  mills  receive  all  their  ore  and 
limestone  by  way  of  this  harbor,  without  which  the  whole  develop- 
ment of  the  steel  industry  at  Gary  would  have  been  impossible. 
The  depth  is  23  feet,  which  is  more  than  adequate  for  the  largest 
freighters  on  the  lakes.  The  lake  boats  unload  their  cargoes  of 
ore  or  limestone  directly  on  the  docks  located  along  the  west  side 
of  the  slip,  close  to  the  twelve  blast  furnaces. 

Calumet  Harbor,  Indiana  Harbor,  and  Gary  Harbor  have 
been  developed  by  and  for  the  steel  industry.  Their  distance  from 
the  business  districts  of  Chicago  has  permitted  them  to  develop 
along  these  specialized  lines.  Apart  from  the  grain  and  oil,  which 
are  exported  from  Calumet  Harbor  and  Indiana  Harbor,  respective- 
ly, the  materials  required  for  the  blast  furnaces  constitute  their  sole 
traffic. 

All  the  iron  and  steel  companies  are  adequately  supplied  with 
docks  and  unloading  equipment.  Cargoes  are  handled  promptly 
and  rapidly.  It  is  to  the  interest  of  a  company  to  see  that  no  time 
is  lost.  The  more  efficient  the  equipment,  the  more  easily  and 
satisfactorily  can  the  steel  company  contract  with  the  ship  owners 
to  handle  its  needed  materials.  The  Government  maintains  the 
harbors  at  South  Chicago  and  Indiana  Harbor,  but  not  at  Gary. 
The  individual  steel  companies  provide  the  dock  equipment  in  all 
three  places.  All  the  companies  have  modern  apparatus,  although 
there  are  considerable  variations  in  the  type  and  in  the  capacity. 
The  latter  depends  upon  the  amount  of  material  which  has  to  be 
handled. 

The  modern  methods  of  unloading  these  bulk  cargoes,  not 
only  in  the  Calumet  District,  but  also  at  other  receiving  ports 
around  the  lower  lakes,  represent  a  great  achievement.  Under 
present  conditions  the  commodities  are  handled  entirely  by 
machinery,  which  although  expensive  to  install,  is,  nevertheless, 
much  cheaper  in  the  long  run  than  were  the  older  methods.  The 
need  for  speed,  the  great  quantities  of  materials  to  be  moved, 
and  the  cost  of  hand  labor,  have  made  this  development  necessary. 

In  1862,  the  only  known  way  to  unload  these  vessels  was  to 
shovel  the  ore  into  buckets  which  were  lowered  into  the  hold  of 

**Iron  Jge,  January  7,  1909,  p.  2. 


60  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [24O 

the  vessel.  These  were  then  hoisted  on  deck  and  their  contents 
dumped  there  ready  to  be  loaded  into  wheelbarrows,  and  taken 
ashore.  By  this  method  it  took  four  days  to  unload  300  tons, 
the  average  cargo  at  that  time.  It  is  difficult  to  imagine  a  10,000 
ton  cargo  from  a  thirty-three  foot  hold  being  unloaded  in  this 
fashion.  The  number  of  trips  which  a  large  boat  would  make  dur- 
ing the  navigation  season  under  these  conditions  would  be  few  in- 
deed. The  invention  of  a  portable  donkey  engine  to  hoist  the  bucket 
reduced  the  time  for  unloading  the  average  schooner  by  one  day. 
By  1882,  a  rig  for  raising  the  bucket  and  conveying  it  to  the  storage 
pile  on  the  dock  was  invented.  It  was  not,  however,  until  1899, 
that  Hulett  invented  an  unloader  with  self-filling  buckets.  This 
reduced  the  time  enormously.  By  1902,  a  cargo  of  5,250  tons  of 
ore  was  unloaded  in  three  hours  and  fifty-two  minutes.  The 
Brown  unloader  was  put  on  the  market  soon  after  this,  and  for 
some  years  Hulett's  and  Brown's  were  in  general  use  at  all  of  the 
iron  ore  receiving  ports.  From  these  early  types  the  modern, 
electric,  automatic,  and  rapidly  operated  machines  have  been 
developed.  The  first  electric  Hulett  was  installed  at  Conneaut  in 
1912.  The  machines  used  in  the  Calumet  District  are  all 
electrically  operated,  and  they  not  only  unload  a  ship  with  as- 
tonishing rapidity,  but  they  also  can  convey  the  material  to  any 
part  of  the  dock.  They  also  are  used  to  transfer  ore  to  the  hoppers 
from  which  it  is  fed  to  the  skips  and  the  furnaces.  (Plate  6).  Ore, 
coal,  and  limestone,  can  all  be  handled  in  this  manner,  and  the 
saving  in  costs  of  handling  is  enormous,  abundantly  justifying  the 
heavy  expense  of  installation.  "When  vessels  were  unloaded  by 
wheel-barrows  it  was  estimated  that  it  cost  50  cents  per  ton  to 
unload  them;  when  the  first  Brown  hoisting  and  conveying  ma- 
chine was  installed  at  the  docks  at  Cleveland  it  was  estimated 
that  it  had  reduced  the  actual  cost  of  unloading  to  18  cents  per 
ton."^^ 

From  the  following  details  of  the  installations  at  the  plants 
located  in  the  Calumet  District,  it  can  be  seen  that  they  possess 
every  modern  convenience  to  facilitate  the  rapid  unloading  and 
handling  of  ore,  coal,  and  limestone  as  inexpensively  as  possible. 
As  a  result  of  these  improvements  which  have  facilitated  unloading 
operations,  the  costs  have  decreased  to  approximately  10  cents 

s^Backerr,  A.  O.,  The  A.  B.  C.  0/ Iron  and  Steel,  p.  48. 


241]  LOCATION  OF  DISTRICT SOURCES  OF  RAW  MATERIAL  61 

per  ton.   Less  modern  equipment  would  put  the  Calumet  operators 
at  a  disadvantage  compared  with  those  at  Lake  Erie  ports. 

The  Illinois  Steel  Company  at  South  Chicago  has  two  docks 
with  a  total  storage  capacity  of  ore  and  limestone  of  about  3,000,000 
tons.  At  the  north  dock,  its  equipment  can  handle  12,000  tons 
in  10  hours,  while  at  the  south  dock,  13,000  tons  can  be  unloaded 
in  the  same  time.  This  large  capacity  is  required  to  handle  the 
enormous  tonnage  of  material  which  the  company  needs  each 
year,  and  to  ensure  an  ample  winter  stock  being  obtained  during 
the  seven  months  navigation  season.  The  Iroquois  plant  is 
equipped  with  unloaders  which  can  handle  10,000  tons  in  12  hours. 
Those  at  the  Wisconsin  dock  move  18,000  tons  in  24  hours.  The 
Federal  Furnace  Company  has  equipment  to  handle  10,000  tons 
in  18  hours.  The  largest  equipment  is  to  be  found  at  Gary  where 
35,000  tons  are  unloaded  in  20  hours  (Plate  7).  The  amount 
handled  there  in  a  year  is  considerably  more  than  3,000,000  tons. 
The  Inland  Steel  Company's  equipment  permits  the  unloading  of 
30,000  tons  in  20  hours.  The  unloaders  at  the  Youngstown  Sheet 
and  Tube  plant  handle  10,000  tons  in  16  hours.^^ 

The  installation  of  so  much  expensive  machinery  has  been 
necessary  because  of  the  bulk  to  be  handled  and  the  need  for 
speed  on  account  of  the  relatively  short  navigation  season.  In 
addition,  the  convenience  of  machine  handling  is  very  great, 
since  it  reduces  the  labor  force  which  would  otherwise  be  neces- 
sary. 

Coal 

The  steel  plants  in  the  Calumet  District  are  as  intimately 
concerned  with  the  supplies  and  sources  of  coal  as  they  are  with 
sources  and  supplies  of  iron  ore.  The  available  supplies  of  high 
grade  coking  coal  are  abundant.  The  pressing  problem,  however, 
results  from  the  high  cost  entailed  in  transporting  this  coal  from 
the  producing  areas.  This  has  a  marked  influence  on  smelting 
practices. 

Sources. — The  Calumet  smelters  have  two  main  sources  of 
coal:  (i)  the  Appalachian  field,  particularly  those  sections  which 
are  located  in  eastern  Kentucky  and  West  Virginia,  and  (2)  the 
Illinois-Indiana  portions  of  the  Eastern  Interior  field. 

^^Crowell  and  Murray,  Iron  Ores  Ojf  Lake  Superior  (1923),  pp.   i'^S-'^l 
and  personal -observation. 


62  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT  •      [242 

These  two  sources  provide  special  types  of  coal  which  are 
utilized  in  different  ways  (Fig.  2).  The  mines  in  eastern  Ken- 
tucky and  West  Virginia  produce  two  main  grades,  high  vola- 
tile and  low  volatile,  both  of  which  are  particularly  good  for  coking 
purposes,  either  individually  or  in  conjunction  with  one  another. 
The  district  producing  high  volatile  coal  lies  in  the  extreme  south- 
ern part  of  West  Virginia  and  adjacent  parts  of  eastern  Kentucky 
and  Virginia.  The  main  producing  mines  in  West  Virginia  are 
located  in  the  Logan,  Kanawha,  and  Konova-Thacker  Districts, 
and  these  produce  about  24,000,000  tons  a  year.  Approximately 
half  of  this  is  mined  in  the  Logan  District,  and  about  one-quarter 
in  the  Konova-Thacker  District.  The  average  percentage  of  fixed 
carbon  in  these  coals  is  about  60.^^  The  low  volatile  coals  are  all 
produced  in  the  Pocahontas,  New  River,  and  Winding  Gulf 
Districts.  The  combined  annual  production  there  is  approxi- 
mately 30,000,000  tons.  By  far  the  most  important  of  the  three 
districts  is  the  Pocahontas  field,  which  produces  18,000,000  tons 
per  annum.  The  remainder  of  the  output  is  divided  equally  be- 
tween the  other  two  areas.  This  variety  of  coal  has  a  fixed  carbon 
content  of  about  70%.^^ 

All  the  steel  companies  of  the  Calumet  District  own  mines  in 
either  West  Virginia  or  eastern  Kentucky,  or  in  both  states. 
In  addition,  the  Illinois  and  Inland  Steel  Companies  own  mines 
in  western  Pennsylvania.  The  development  of  these  coal  pro- 
ducing areas  has  made  it  possible  for  the  companies  in  the  Calumet 
District  to  obtain  adequate  supplies  of  coal  which  produce  a  coke, 
equal,  if  not  superior  in  quality,  to  the  famous  Connellsville  coke, 
with  which  the  Pittsburgh  steel  industry  is  supplied.  The  Connells- 
ville coal  is  eminently  suitable  for  coking  purposes,  and  is  a 
medium  volatile  variety,  having  a  fixed  carbon  content  of  57%. 
The  Pittsburgh  demand  for  this  variety  of  coal  is  very  great  and 
the  reserves  are  diminishing  rapidly.  Consequently,  Calumet 
companies  have  been  obliged  to  look  elsewhere  for  their  sup- 
plies, and  in  doing  so  they  have  become  possessed  of  enormous 
reserves.  As  will  be  shown  in  the  course  of  this  discussion,  they 
have  been  able  to  offset,  to  a  very  large  degree,  the  disadvantage 

'^Shurick,  A.  T.,  The  Coal  Industry^  p.  223. 
^^Ibid.,  p.  223. 


243]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   IMATERIAL  6 


of  being  obliged  to  pay  the  high  costs  of  transporting  it  some  six 
hundred  miles. 

Many  parts  of  the  Appalachian  field  have  not  been  touched, 
partly  owing  to  the  lack  of  demand  and  partly  owing  to  lack  of 
communications.  Mining  operations,  until  quite  recent  times, 
had  been  concentrated  largely  in  the  Pennsylvanian  portion  of  this 
field,  and  it  has  been  only  in  the  last  few  years  that  extensive 
operations  have  been  carried  on  in  areas  more  remote  from  Pitts- 
burgh. Production  in  eastern  Kentucky  has  doubled  in  the 
last  twelve  years,  while  there  has  been  also  a  large  increase  in  that 
of  West  Virginia.  The  mainstay  of  the  coking  industry  has  been 
the  famous  Connellsville  coal,  but  the  enormous  inroads  into  the 
reserves  in  that  area  are  rapidly  depleting  them  as  previously 
noted.  The  need  for  large  and  constant  supplies  of  coal  for  special- 
ized uses  in  the  metallurgical  industries  has  been  responsible  for 
the  southward  extension  of  coal  production.  It  has  been  estimated 
that  the  Appalachian  coal  field  contains  nine-tenths  of  the  high 
grade  coal  of  the  United  States,  so  that  there  appear  to  be  adequate 
reserves  for  many  years  to  come. 

The  Eastern  Interior  field  contains  large  reserves  of  low 
grade,  high  volatile  coal.  Its  inferior  quality  tends  largely  to  offset 
the  advantage  of  proximity  to  the  Calumet  District.  Some  of  the 
producing  areas  are  only  fifty  miles  away  from  Chicago,  but  their 
coal  is  of  the  poorest  grade  in  the  whole  field.  In  Illinois  the  most 
important  areas,  so  far  as  the  iron  and  steel  industry  is  concerned, 
are  the  Central  District  and  the  Williamson-Franklin  District 
in  the  southern  part  of  the  state.  In  Indiana,  the  Clinton  and 
Linton  fields  are  the  most  important. 

Mining  Operations. — Mining  operations  in  eastern  Kentucky 
and  West  Virginia  are  simple,  since  the  seams  outcrop  on  the 
hillsides,  and  drift  mining  is  the  general  practice  (Plate  8).  The 
coal  can  be  loaded  almost  entirely  by  gravity  into  the  railroad 
cars,  which  are  assembled  on  the  valley  floor.  The  development  of 
these  mining  districts  from  which  the  steel  industries  of  Chicago 
draw  the  bulk  of  their  supplies  of  coking  coal  had  to  await  the  build- 
ing of  railroads  into  the  area.  When  the  mining  companies  com- 
menced operations  in  these  districts  communications  were  ex- 
ceedingly primitive.  The  first  coal  which  was  produced  at  Benham, 
eastern  Kentucky,  was  hauled  over  the  mountains  in  wagons  for 
shipment  by  the  existing  railroad  to  the  Wisconsin  plant  at  South 


64  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [244 

Chicago.  Coal  has  been  the  main  motive  for  railroad  expansion 
into  these  isolated  mountain  valleys. 

Large  scale  operations  appear  to  be  the  general  rule.  This 
has  been  found  necessary  in  order  to  overcome  the  difficulties  of 
marketing  the  product  from  districts  which  are  remote  from  the 
consuming  centers.  Many  of  the  mines  are  operated  and  owned 
by  the  consumers  of  the  product.  The  reason  for  this  is,  no  doubt, 
the  desire  to  assure  themselves  of  an  adequate  supply  and  reserve 
of  special  grades  of  coal.  Among  the  more  important  of  these 
consumer-owners  are  the  steel  companies.  As  has  been  noted  al- 
ready, the  supply  of  coking  coal  is  the  most  expensive  item 
in  the  manufacture  of  iron  and  steel.  Hence  it  is  natural  that  the 
steel  interests  should  control  as  far  as  possible  adequate  supplies, 
and  so  avoid  the  disadvantages  of  purchasing  from  outside  sources. 
"About  50%  of  the  consumer-owned  production  is  from  mines 
controlled  by  the  steel  companies,  who  obtain  more  than  three- 
quarters  of  their  requirements  from  their  own  mines."^'  Some  of 
the  more  efficient,  as  well  as  larger,  producing  mines  in  these  dis- 
tricts are  operated  by  the  steel  interests.  Perhaps  the  best  ex- 
ample is  the  mine  of  the  United  States  Steel  Corporation  at  Lynch, 
West  Virginia,  which  has  the  record  for  tonnage  loaded  in  one  day 
from  a  single  tipple.^" 

In  Illinois  and  Indiana,  the  coal  is  recovered  both  by  pit  and 
stripping  methods.  The  better  grades  are  found  at  an  average 
depth  of  from  300  to  500  feet.  Mining  costs  are  increased  by  water 
and  gas  problems.  Many  of  the  mines  are  operated  by  large  cor- 
porations, but  there  are  numerous  quite  small  enterprises  in  both 
states.  The  Illinois  Steel  Company  owns  mines  in  Illinois  from 
which  it  drav/s  all  its  supplies  of  steam  coal. 

Transportation  and  Cost  of  Assembling. — The  coal  from  the 
eastern  mining  districts  is  either  sent  by  rail  to  Toledo,  Sandusky, 
or  Ashtabula,  and  transferred  to  lake  freighters,  which  deliver  it 
at  the  docks  of  the  steel  companies  in  the  Calumet  District  (Plate 
9),  or  it  is  sent  by  rail  direct.  The  difference  in  the  cost  is  approxi- 
mately fifty  cents  per  ton  in  favor  of  the  rail-lake  route,  in  spite 
of  the  fact  that  this  adds  several  hundred  miles  to  the  distance 
the  coal  has  to  be  moved. 

"Shurick,  A.  T.,  The  Coal  Industry,  p.  260. 
"/^/W.,  p.  260. 


245]  LOCATION   OF  DISTRICT SOURCES  OF  RAW   MATERIAL  65 

Because  of  the  closing  of  lake  navigation  in  winter,  it  is  neces- 
sary to  utilize  the  all-rail  route  during  that  time.  An  adequate 
supply  of  coal  cannot  be  accumulated  during  the  navigation 
season  since  this  type  of  coal  deteriorates  rapidly  and  cokes  badly, 
if  it  is  exposed  to  the  air  for  several  months. 

The  freight  charges  by  the  all-rail  route  on  bituminous  coal 
from  eastern  Kentucky  and  West  Virginia  are  from  $3.09  to  $3.29 
per  net  ton.  For  Pocahontas  coal  the  charge  is  $3.29  per  net 
ton.^i 

Four  principal  railroads  handle  this  movement,  the  Louis- 
ville and  Nashville,  the  Chesapeake  and  Ohio,  the  Norfolk  and 
Western,  and  the  Baltimore  and  Ohio.  These  lines,  with  the 
exception  of  the  last  named,  make  connection  with  the  "Big 
Four"  and  Pennsylvania  railroads  which  give  access  to  the  Calu- 
met District.  Both  of  the  latter,  as  well  as  the  Baltimore  and  Ohio, 
have  connections  with  the  three  Belt  Railroads  which  serve  the 
various  iron  and  steel  mills  in  the  Calumet  District  (Fig.  2), 
The  location  of  this  district  on  the  eastern  approach  to  Chicago 
facilitates  delivery,  which,  of  course,  is  made  before  the  congested 
yards  nearer  the  city  are  reached. 

If  the  rail-lake  route  is  used,  the  railroad  charges  are  $2.06 
per  net  ton  plus  eight  cents  for  loading,  which  makes  a  total  of 
$2.14  per  net  ton  on  board  the  freighter.  Lake  transportation  varies 
from  55  cents  to  65  cents,  depending  on  the  prevailing  rates  on 
ore,  and  the  amount  of  shipping  available.  Those  companies  in 
the  Calumet  District  which  utilize  the  rail-lake  route  regularly 
make  annual  contracts  in  the  spring  for  the  full  amounts  to  be 
carried  just  as  is  done  in  the  case  of  iron  ore.  The  freight  rates 
from  the  mines  to  the  Calumet  ports  by  the  rail-lake  route  average 
32.70  per  net  ton.  This  represents  a  considerable  saving  compared 
with  the  charge  for  the  all-rail  haul.  If  allowance  is  made  for  the 
costs  of  insurance,  the  share  chargeable  to  coal  traffic  for  the  up- 
keep of  unloading  machinery  at  the  docks,  fire  risks,  storage  costs, 
and  loss  of  interest  on  the  amount  of  capital  tied  up  as  a  result  of 
the  large  stocks  accumulated,  the  actual  amount  saved  is  about 
45  cents  per  net  ton.  The  Illinois  Steel  Company  does  not  use  the 
lake  facilities  for  the  transportation  of  coal.*-     In  1923,  Indiana 

"I.  C.  C,  9969. 

^^The  Illinois  Steel   Company  operates   the   plant  of  the  Indiana  Steel 
Company  at  Gary. 


66  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [246 

Harbor  and  South  Chicago  received  2,402,523  tons  of  coking 
coal  from  the  eastern  fields  by  boat  from  Toledo,  Sandusky,  and 
Ashtabula."' 

The  same  type  of  boat  and  of  unloading  apparatus  is  used  for 
coal  as  for  ore.  Specialized  equipment  which  dumps  the  coal  into 
the  boats  directly  from  the  railroad  cars  has  been  devised  to  make 
rapid  loading  possible.  Since  all  the  coal  is  pulverized  before  being 
coked,  rough  handling  does  not  impair  its  value.  Coke,  on  the 
other  hand,  could  not  be  handled  in  this  way  because  of  the 
breakage. 

All  the  coal  from  Illinois  and  Indiana  is,  of  course,  transported 
by  rail.  Freight  rates  range  from  $1.60  to  $1.95  per  net  ton 
according  to  the  location  of  the  mines.*^  The  Illinois  Central,  the 
Chicago  and  Eastern  Illinois,  and  the  Chicago  Burlington  and 
Quincy  Railroads  handle  most  of  this  traffic.  The  Illinois  Steel 
Company  has  an  advantage  over  other  producers  in  that  its  own 
railroad,  the  Elgin  Joliet  and  Eastern,  taps  some  of  these  mines. 

Fue/  Consumption. — Economy  in  the  use  of  coal  is  a  major 
consideration  in  the  Calumet  District.  This  is  necessary  in  order 
to  minimize  the  disadvantage  of  the  high  cost  of  transporting 
coking  coal  from  the  mining  areas.  There  are  considerable  varia- 
tions in  technique,  owing  to  the  different  conditions  under  which 
the  iron  and  steel  plants  are  organized  and  operated,  due  in  turn 
to  differences  in  equipment,  and  viewpoint,  but  in  all  of  the  plants 
particular  attention  is  paid  to  the  conservation  of  fuel. 

Coal  is  classified  under  three  heads  from  the  smelters'  point 
of  view,  according  to  the  purpose  it  serves,  as  coke,  steam,  or  gas 
coal.  Coking  coal  is  by  far  the  most  important,  and  all  this  is 
brought  from  the  eastern  districts.  Approximately  8,000,000 
tons  of  this  variety  are  normally  consumed  each  year  in  the 
Calumet  District. 

The  high  volatile  coals  from  eastern  Kentucky  and  West 
Virginia  are  best  suited  for  the  making  of  gas,  most  of  the  pro- 
ducer-gas being  obtained  from  this  type.  No  mills  in  the  district 
utilize  Illinois  or  Indiana  coal  for  this  purpose,  since  a  high  grade 

■•^(a)   Lake  Carriers  Association,  Report  of  Secretary. 
(b)    Fig.    2  shows   sources   and    available  routes   for   transportation   to 
Calumet  District. 

"I.  C.  C,  E.  1625  and  8134. 


247]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  6/ 

variety  is  essential  to  maintain  an  even  heat  in  the  steel  furnaces 
and  soaking  pits.''^ 

It  is  not  possible  to  determine  just  how  much  coal  from  mines 
in  Illinois  and  Indiana  is  consumed  by  the  steel  industries  in  the 
Calumet  District.  Probably  most  of  what  is  used  comes  from 
Illinois,  since  the  Inland,  Illinois,  and  Federal  companies  draw  all 
their  supplies  of  steam  coal  from  that  state.  The  first  two  com- 
panies are  by  far  the  largest  consumers  in  the  district.  The  follow- 
ing figures  give  the  consumption  of  Illinois,  Indiana,  and  eastern 
coals,  excluding  anthracite,  in  the  Chicago  switching  district: 

Coal  Consumption  in  the  Chicago  Switching  District,   1917*^ 

From  Illinois 1 1,722,91 1  net  tons 

From  Indiana 5,667,962  net  tons 

17,390,873  net  tons 

Eastern  states 8,886,153  net  tons 

Total 26,277,026  net  tons 

Of  course  much  of  this  Illinois-Indiana  coal  is  not  utilized  in  the 
iron  and  steel  plants,  but  probably  it  is  true  that  the  steel  com- 
panies obtain  twice  as  much  coal  from  Illinois  as  from  Indiana. 

Illinois  and  Indiana  coal  cannot  be  used  profitably  as  a  coking 
medium.  Judge  Gary  criticised  the  former  in  the  following  words: 
"The  best  Illinois  coal  is  cokeable,  but  in  the  first  place  it  is  very 
high  in  sulphur,  which  could  be  eliminated  at  a  certain  cost,  but 
worse  than  that,  the  physical  structure  is  such  that  it  is  not 
practicable.  It  will  not  carry  the  burden  of  the  furnace."'*^  Another 
big  defect  is  the  high  percentage  of  ash,  which  makes  its  use  much 
more  expensive.^^  Similar  defects  are  inherent  in  the  Indiana  coal. 
Consequently,  Illinois  and  Indiana  coals  are  used  only  for  steam 
purposes.  A  definite  opinion  regarding  this  type  of  coal  was 
expressed  as  early  as  1864,  when  Wilkeson  wrote,  "Bituminous 
coal,  such  as  has  been  found  best  for  smelting,  contains  from 
55%  to  60%  of  carbon.  Any  coal  of  this  kind  containing  more  than 
4%  of  ashes  or  yielding  red  ashes  is  not  considered  suitable  for 

^^Based  on  information  supplied  by  mill  superintendents,  and  Iron  Age, 
January  3,  1924,  p.  107. 

*^Coal  Age,  January  5,  1922,  p.  18.  No  figures  are  available  for  the  years 
subsequent  to  1917. 

'^"'Iron  Age,  January  7,  1909,  p.  2. 

^^Officlal  of  Illinois  Steel  Corporation. 


68  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [248 

smelting  iron,  and  a  small  percentage  of  sulphur  unfits  it  for  that 
purpose."'*'  As  a  medium  for  raising  steam,  however,  Illinois- 
Indiana  coal  is  used  in  large  quantities,  since  it  costs  less,  mainly 
because  the  freight  rate  to  the  Calumet  District  is  less  than  that 
from  the  East.  The  present  price  for  Illinois  steam  coal  ranges 
from  $1.65  to  $2.00  per  ton  at  the  mines.  Indiana  coal  of  similar 
quality  varies  from  $1.40  to  ?i.75  per  ton  at  the  mine.  On  the 
other  hand,  coking  coal  from  eastern  Kentucky  costs  $1.60  to  $.175 
per  ton  at  the  mine.  An  excellent  grade  of  slack  coal,  superior  for 
steam  purposes  to  that  of  Illinois  and  Indiana,  can  be  bought  on 
the  open  market  at  from  75  cents  to  $1.00  per  ton  at  the  mines  in 
eastern  Kentucky,  but  the  high  freight  rate  eliminates  it  from  the 
Chicago  market.^" 

As  already  implied,  the  most  important  use  of  coal  in  the 
iron  and  steel  industry  is  for  the  production  of  coke.  Coking  coal 
is  classified  under  two  heads,  low  volatile,  and  high  volatile,  accord- 
ing to  whether  it  contains  more  or  less  than  70%  of  fixed  carbon 
respectively.  The  remaining  constituents,  chiefly  compounds  of 
hydrogen  and  nitrogen,  are  volatile. 

High  grade  coke  is  hard,  and  possesses  a  fine  even  texture. 
Successful  smelting  is  possible  only  when  a  good  grade  of  coke  is 
used.  The  aim,  therefore,  of  every  coke  producer  is  to  obtain  this 
high  grade  material.  When  coal  is  roasted  in  a  sealed  retort,  the 
hydrogen  and  nitrogen  combine  and  burn.  This  in  turn  carbonizes 
the  coal.  The  more  complete  this  combustion  is,  the  better  the 
grade  of  coke.  If  low  volatile  coal  only  is  used  (Pocahontas),  the 
amount  of  gaseous  material  is  insufficient  to  cause  complete  com- 
bustion, and  the  resulting  coke  is  soft  and  poor  in  quality.  At  the 
same  time  the  by-products  resulting  from  the  process  are  small  in 
amount.  If,  on  the  other  hand,  high  volatile  coal  is  used  (eastern 
Kentucky),  combustion  will  be  complete,  a  larger  amount  of  by- 
products will  be  produced,  but  the  quantity  of  coke  will  be  cor- 
respondingly smaller.  Therefore  the  problem  of  the  steel  com- 
panies is  to  blend  these  two  varieties  of  coal  so  as  to  produce  a 
large  percentage  of  hard  coke  of  good  texture,  which  will  stand 
up  well  under  the  load  in  the  furnace  and  burn  evenly,  as  well  as  a 
reasonable  supply  of  by-products. 

^'VVilkeson,  J.,  The  Manufacture  oj  Iron  in  Buffalo  (1864),  p.  5. 
^°The  President,  Columbus  Mining  Company,  January  22,  1925. 


249]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  69 

Two  factors  influence  the  blending  of  the  two  types  of  coal. 
In  the  first  place,  if  a  company  owns  and  mines  a  greater  quantity 
of  one  particular  variety,  then  more  of  that  kind  will  be  used  in 
the  coking  mixture,  since  its  own  coal  will  cost  the  company  much 
less  than  that  which  is  bought  on  the  market,  and  it  is  an  advantage 
to  the  company  to  keep  its  own  mines  running  regularly.  Secondly, 
if  the  company  needs  a  large  quantity  of  by-products,  a  larger 
proportion  of  high  volatile  is  used.  As  a  result,  each  company 
in  the  Calumet  District  uses  its  own  particular  mixture  based  on 
these  two  factors.  The  Illinois  Steel  Company  uses  65%  of  low 
volatile  and  35%  of  high  volatile.  This  combination  yields  what 
is  considered  to  be  a  very  high  grade  coke,  and  also  a  large  volume 
of  by-products  which  are  utilized  in  the  plant.  This  company  has 
large  reserves  of  Pocahontas  low  volatile  coal  in  West  Virginia. 
The  Wisconsin  Steel  Company  uses  quite  a  diff^erent  mixture. 
It  draws  85%  of  its  coal  from  its  own  mines  at  Benham,  Kentucky, 
and  purchases  only  15%  from  West  Virginia.  Its  own  coal  is  of 
the  high  volatile  type,  and  therefore  it  is  not  surprising  to  find 
that  it  makes  its  coke  from  a  mixture  containing  85%  of  this  kind. 
The  resulting  coke  satisfies  their  requirements,  and  there  is  a  sur- 
plus of  by-products  for  sale,  over  and  above  what  are  used  in  the 
steel  mill.  The  By-products  Coke  Corporation  only  uses  15%  of 
low  volatile  coal  in  its  coking  mixture,  since  it  is  particularly  in- 
terested in  producing  large  quantities  of  by-products.  However, 
this  coke  is  of  sufficiently  good  grade  to  command  a  ready  sale  to 
the  various  independent  steel  companies,  who  need  extra  supplies. 
The  Youngstown  Sheet  and  Tube  Company  uses  80%  of  high 
volatile  coal  in  its  mixture,  since  its  major  reserves,  located  in 
eastern  Kentucky,  are  of  this  grade,  and  the  resulting  coke  is 
satisfactory  for  its  purposes  both  in  hardness  and  texture. ^^ 

Since  the  bulk  of  the  eastern  coal  is  converted  into  coke  at 
by-product  coking  plants  attached  to  the  steel  mills,  the  relation- 
ship between  them  is  very  close.  Successful  co-operation  between 
the  coking  plants  and  the  steel  mills  reduces  the  cost  of  coke,  and 
this  helps  materially  to  offset  the  high  railroad  rates  on  coal. 
Considerable  economies  are  possible  if  the  by-products  from  the 
coke  ovenS  are  utilized  as  fuel.  The  steel  companies,  by  making 
their  own  coke,  are  able  to  produce  the  kind  they  want,  from  the 

"From  Information  supplied  by  Iron  and  Steel  Mill  officials. 


70  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [25O 

particular  varieties  of  coal  they  prefer  to  use;  at  the  same  time 
they  use  a  mixture  of  coals  which  will  give  them  the  amounts  of 
by-products  they  wish,  either  to  use  as  fuel  or  to  sell.  In  some  cases 
there  is  a  surplus  which  finds  a  ready  market  in  the  neighboring  ur- 
ban districts.  In  the  Calumet  District  there  are  1,038  coke  ovens  dis- 
tributed among  four  of  the  steel  plants.  In  1923,  these  ovens  con- 
verted approximately  7,000,000  tons  of  coal  into  5,144,000  tons  of 
coke  (Table  VI).  This  supply  was  supplemented  by  that  of  two 
commercial  by-product  coke  companies  with  an  equipment  of 
385  ovens,  which  produced  1,557,000  tons  of  coke  from  2,022,000 
tons  of  coal. 

Most  of  the  independent  steel  producers  in  the  Calumet  Dis- 
trict buy  coke  produced  by  the  By-product  Coke  Company.  Only 
the  Illinois  and  Wisconsin  Steel  companies  are  self-sufficing. 

The  largest  coking  plant  in  the  district  is  located  at  Gary, 
where  700  Kopper  ovens  carbonize  nearly  4,500,000  tons  of  coal 
per  annum.  All  of  this  is  transported  by  rail  from  West  Virginia, 
eastern  Kentucky,  and  Western  Pennsylvania.  The  Illinois 
Steel  Company  considers  that  the  year-round  services  of  the  rail- 
road offset  the  slightly  cheaper  rates  afforded  by  the  rail-lake 
route,  which  is  only  in  operation  for  about  seven  months  each  year. 
Coal  deteriorates  by  standing,  even  if  it  is  covered,  and  by 
utilizing  the  railroads  regularly  the  company  is  assured  of  a  daily 
supply  of  fresh  coal.  At  the  same  time,  the  company's  mines  are 
kept  running  regularly,  the  necessary  storage  space  is  reduced, 
and  the  fire  hazard  is  decreased.  The  railroad  companies  always 
offer  preferential  service  for  large  and  regular  customers.  They 
themselves  are  also  the  biggest  customers  of  the  steel  company, 
and  consequently  it  pays  the  latter  to  give  them  employment. 
The  coking  plant  at  Gary  is  located  half  a  mile  from  the  docks, 
and  if  coal  were  brought  by  boat  it  would  have  to  be  reloaded  into 
cars  and  switched  to  the  coal  stores.  This  would  increase  the 
handling  expenses.^^ 

All  the  other  steel  companies  which  have  coking  plants, 
utilize  the  lake  vessels  to  obtain  nine  months'  supply,  and  by 
doing  so  they  claim  to  save  from  forty  to  fifty  cents  per  ton  in 

^^It  seems  probable  that  the  Indiana  Steel  Company  did  not  plan  to  obtain 
its  coal  by  lake  in  order  to  leave  the  eastern  side  of  the  harbor  available  for 
use  as  an  ore  dock  to  serve  the  National  Tube  Mills  which  are  now  being  built. 


251] 


LOCATION  OF  DISTRICT SOURCES  OF  RAW  MATERIAL 


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72  IRON  AND  STEEL  INDUSTRY  OF  THE  CALL:MET  DISTRICT         [252 

freight  rates.  They  rely  upon  the  railroads  to  transport  three 
months'  supply  during  the  winter.  They  mix  the  fresh  coal  with 
that  already  on  hand  in  order  to  minimize  the  bad  effects  of  storage. 

Very  little  coke  is  shipped  to  the  Calumet  District.  The  Gary 
plants  supply  all  the  needs  of  the  Illinois  Steel  and  Indiana  Steel 
companies.  The  others,  with  the  exception  of  the  Wisconsin 
Steel  Company,  purchase  extra  supplies  locally.  The  latter  pro- 
duces sufficient  for  two  of  its  furnaces,  but  when  the  third  one  is  in 
blast  the  coke  for  it  is  obtained  from  Benham,  eastern  Kentucky, 
where  the  company  maintains  a  battery  of  beehive  ovens  to  take 
care  of  this  occasional  demand.^^ 

Where  coke  ovens  function  regularly,  and  are  run  in  con- 
junction with  a  steel  plant,  there  is  a  steady  supply  of  by-product 
gas  and  tar,  which  are  available  for  use  as  fuel  in  lieu  of  coal, 
producer  gas,  or  fuel  oil.  Other  by-products,  such  as  ammonium 
sulphate,  ammonia  liquor,  benzol,  napthaline,  together  with  any 
surplus  gas  and  tar,  find  a  ready  market  in  the  immediate  vicinity. 

There  is  some  variation  between  the  different  steel  plants  in 
the  way  these  by-products  are  used.  The  Wisconsin  Steel  Company 
runs  its  Open  Hearth  furnaces  almost  entirely  on  by-product  gas. 
Of  the  total  gas  produced  at  its  plant,  35%  is  used  for  fuel  in  the 
coke  ovens  themselves,  and  what  is  not  required  in  the  Open 
Hearth  furnaces  is  sold  to  the  By-product  Coke  Corporation 
which  supplies  gas  to  Chicago.  On  the  other  hand,  the  Youngs- 
town  Sheet  and  Tube  Company  uses  tar  for  heating  its  Open 
Hearths,  claiming  that  this  fuel  maintains  a  more  nearly  uniform 
temperature  than  does  gas,  and  that  this  improves  the  quality  of 
the  steel  and  increases  the  tonnage  produced.  Still  another 
variation  is  adopted  by  the  Inland  Steel  Company,  which  uses 
fuel  oil  or  tar,  whichever  happens  to  be  the  cheaper.  The  Illinois 
Steel  Company  at  South  Chicago  uses  other  means  of  economizing 
in  coal  consumption,  since  there  is  no  coking  plant  attached  to 
those  works.  As  will  be  shown  later,  it  employs  blast  furnace 
gases  extensively  for  this  purpose. 

Owing  to  the  actual  location  of  some  of  the  fuel  consuming 
departments,  to  the  inadequacy  of  the  supply  of  by-product  gas, 
or  to  the  small  amount  required  by  some  particular  unit,  it  is  not 


"The  writer  is  indebted  to  the  officials  of  the  various  by-product  plants 
for  much  of  the  above  information. 


253  J  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  73 

always  worth  while  to  construct  the  necessary  connections  to 
supply  by-product  gas.  In  these  cases  heat  is  obtained  by  using 
producer  gas.  This  equipment  can  be  installed  satisfactorily 
almost  anywhere,  and  it  can  be  built  to  supply  large  or  small  quan- 
tities. The  individual  units  for  manufacturing  producer  gas  are 
small,  but  larger  quantities  of  gas  can  be  obtained  by  installing 
them  in  groups.  Convenience,  rather  than  superior  merit,  seems  to 
be  the  reason  for  the  large  use  of  this  form  of  fuel.  It  is  utilized 
mainly  for  heating  soaking  pits  and  re-heating  ovens,  in  the  bloom- 
ing and  sheet  mills.  In  some  cases  the  producer  plant  forms  a  part 
of  a  particular  re-heating  furnace.  In  such  cases  the  additional 
space  occupied  is  very  small.  Consequently,  this  type  of  furnace  is 
particularly  suited  to  crowded  conditions. 

Considerable  use  is  made  of  fuel  oil,  either  alone  or  in  con- 
junction with  tar,  in  connection  with  Open  Hearth  and  rolling 
mill  practices.  In  the  various  plants  using  them  the  choice  is 
determined  partly  by  the  prevailing  prices  of  each,  and  partly  by 
the  availability  of  adequate  supplies  of  tar  from  the  coking  depart- 
ment. Where  no  coking  plant  is  close  at  hand,  as  in  the  case  of  the 
Illinois  Steel  Works  at  South  Chicago,  the  use  of  oil  is  restricted  as 
far  as  practicable  in  favor  of  other  types  of  fuel  because  of  the 
cost  factor.  The  Inland  Steel  Company  prefers  fuel  oil  for  Open 
Hearth  practices  because  it  claims  that  this  fuel  reduces  the  time 
of  "heats"  by  io%  to  15%,  and  thereby  increases  production 
sufficiently  to  offset  any  additonal  costs.  The  installation  for  fuel 
oil,  or  tar,  or  both,  is  not  difficult  to  arrange  and  it  is  easy  to  change 
from  one  to  the  other  during  the  process  of  a  particular  heat. 
"Originally  the  oil  was  used  in  the  crude  form  without  the  removal 
of  any  of  the  more  volatile  hydrocarbons.  Naturally,  the  low 
flash  point  of  such  oils  made  them  unsafe  to  handle.  Moreover, 
the  development  of  wider  uses  for  these  lighter  oils  demanded  their 
extraction  from  the  crude.  The  removal  of  these  lighter  hydro- 
carbons raised  the  flash  point  of  the  residue,  giving  a  resultant 
product  which  could  be  used  with  more  safety."^* 

The  fuel  oil  is  imported  directly  from  Tulsa,  Oklahoma,  since 
the  Calumet  District  has  good  railroad  connections  with  that  oil- 
producing  center.^^ 


^Iron  Age,  Nov.  2,  1922,  pp.  1138-39. 

"From  information  supplied  by  officials  of  the  steel  companies. 


74  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [254 

In  the  case  of  the  Inland  Steel  Company,  the  oil  is  unloaded 
from  the  cars  by  gravity,  into  three  50,000  gallon  tanks,  and  from 
these  it  is  pumped  into  three  storage  tanks  of  300,000  gallon 
capacity,  from  which  it  is  fed  to  the  furnace.''^ 

It  seems  curious,  at  first  thought,  that  the  local  oil  refineries 
do  not  get  a  share  of  this  business.  The  explanation  is  simply 
that  the  Whiting  oil  interests  cannot  keep  pace  with  the  demand 
for  lighter  oils,  and  therefore  have  no  fuel  oil  for  sale.  When  they 
have  removed  all  the  products  which  they  need,  the  residue  is 
useless  to  the  steel  companies  for  heating  their  Open  Hearth 
furnaces  and  soaking  pits." 

The  motive  behind  these  variations  in  the  use  of  particular 
fuels  is  clearly  to  obtain  the  maximum  production  with  a  mini- 
mum expenditure  of  fuel,  in  order  to  eliminate  in  part  the  dis- 
advantage of  the  long,  expensive,  railroad  haul  for  coal. 

Conservation  Practices  Which  Economize  the  Use  of  Fuel. — 
Since  all  the  plants  in  the  Calumet  District  are  of  modern  design 
and  construction,  it  is  possible  to  adopt  all  the  better  practices 
for  fuel  conservation.  "In  every  well  conducted  industry  it  is  the 
aim  to  utilize  to  the  best  advantage  the  raw  materials  entering 
into  the  main  product.  .  .  .  New  methods  are  sought  and 
economies  practised  which  will  enable  the  manufacturer  to  com- 
pete with  those  more  fortunately  situated  in  regard  to  the  avail- 
able supplies  of  natural  resources. "^^ 

Utilization  of  Blast  Furnace  Gases. — The  blast  furnace,  which 
is  the  largest  user  of  fuel,  also  produces  a  valuable  by-product  in 
the  form  of  gas,  in  which  half  or  more  of  the  heat  value  of  the  coke 
consumed  is  present.^^  This  gas  contains  carbon  monoxide,  carbon 
dioxide,  nitrogen,  hydrogen,  and  water  vapor,  together  with  flue 
dust.  The  heating  value  of  the  gas  is  derived  almost  entirely  from 
the  carbon  monoxide,  which  represents  28%  of  the  total  amount 
of  gas  and  registers  90  B.  T.  U.  per  cubic  foot.®"  A  modern  600-ton 
blast  furnace  uses  approximately  560  tons  of  coke  each  twenty-four 

^^Iron  Age,  July  10,  1919,  pp.  45-46. 

^'Officials  of  Inland  Steel  Company. 

^^Chemical  and  Metallurgical  Engineering,  XXIX,  No.  20,  November  12, 
1923,  pp.  873-76. 

^^Iron  Age,  December  20,  1923,  p.  1651. 

^''Quarrie,  B.  D.,  "Operation  of  the  Blast  Furnace,"  Iron  Ores  oj  Lake 
Superior  (1923),  p.  122. 


255]  LOCATION  OF  DISTRICT SOURCES  OF  RAW   MATERIAL  75 

hours.  In  the  production  of  600  tons  of  iron  nearly  70,000,000  cubic 
feet  of  gas  are  produced. ^^ 

The  economies  which  can  be  effected  by  the  use  of  blast- 
furnace gas  for  heating  purposes,  depend  upon  the  type  of  the 
equipment  employed.  The  most  important  device  in  this  connec- 
tion is  the  hot  blast  stove,  which  requires  from  15%  to  50%  of 
the  total  gas  produced,  according  to  the  area  of  its  heating  surface, 
the  type  of  burner  used,  and  the  gas-cleaning  equipment. ^^ 

The  dust  laden  gas  is  led  through  dry  dust  catchers  which 
reduce  its  velocity,  causing  much  of  the  dust  to  be  deposited. 
Dry  or  wet  cleaners  are  then  used,  according  to  the  purpose  for 
which  the  gas  is  intended.  By  using  clean  gas,  the  cost  of  cleaning 
and  repairing  the  stoves  is  reduced.  Its  use  gives  a  higher  blast 
temperature,  and  so  reduces  the  amount  of  coke  necessary  to 
obtain  the  same  tonnage  of  iron,  and  thereby  the  latter  is  produced 
less  expensively  than  it  otherwise  could  be.  Less  gas  is  also  con- 
sumed in  the  stoves,  so  that  more  is  available  for  boiler  and  gas 
engine  uses.*^ 

The  electric  power  in  all  the  steel  plants  is  produced  almost 
entirely  by  the  use  of  fuel,  particularly  the  blast  furnace  gases, 
which  under  the  practice  of  earlier  days  would  have  been  wasted. 

The  efficient  use  of  this  source  of  energy  is  best  illustrated  by 
the  practice  of  the  Illinois  Steel  Company,  whose  plant  is  almost 
entirely  electrically  operated,  the  power  being  obtained  through 
the  medium  of  these  gases.  The  company  has  eleven  blast  furnaces, 
and  some  time  ago  it  was  discovered  that  the  production  of  electric 
power  did  not  utilize  all  the  surplus  gas.  The  engineer  decided  to 
use  some  of  the  excess  in  the  reheating  furnace  of  the  pipe  mill,  by 
mixing  it  with  producer  gas,  using  40%  of  the  former  and  60%  of  the 
latter.  The  results  were  quite  satisfactory.  As  this  did  not  use  all 
the  surplus,  six  plate  mill  furnaces  were  equipped  to  use  the  same 
mixture,  with  equally  good  results.  Even  this  did  not  fully  utilize 
the  supply,  sufficient  remaining  to  be  used  in  conjunction  with  tar 
for  the  heating  of  two  200-ton,  tilting  Open  Hearth  furnaces  of  the 
most  modern  design.  In  this  case,  a  50%  mixture  of  tar  and  gas  was 
employed,  and  the  only  noticeable  difference  in  the  performance  of 
these  furnaces  was  that  they  were  a  trifle  slower  in  operation.^^  It 

^^Iron  Age,  April  13,  1922,  p.  995. 

^"^Ibid.,  December  20,  1923,  pp.  1651-52. 

^Ib'd.,  May  29,  1924. 

^Ibid.,  Dec.  20,  1923,  p.  1652,  and  personal  inquiry. 


76  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [256 

may  be  noted  in  passing  that  the  Inland  Steel  Company  heats  its 
plate  mill  furnaces  with  both  producer  gas  and  powdered  coal.  Con- 
sequently, they  are  more  expensive  to  operate.  It  should  be  borne 
in  mind,  however,  that  a  very  large  volume  of  gas  is  produced 
by  a  plant  which  has  at  least  six  furnaces  in  operation  at  one  time. 
Consequently,  there  is  more  scope  for  such  economies  at  plants 
like  that  of  the  Illinois  Steel  Company  at  South  Chicago,  than  in 
smaller  ones  with  only  one,  two,  or  three  furnaces,  since  the  sur- 
plus in  these  cases  is  much  less.  The  Gary  Plant  generates  from  its 
blast  furnace  and  coke  oven  gases  all  the  heat,  light,  and  power  for 
Gary  mills,  the  Buffington  Portland  Cement  plant,  and  the  rail- 
road terminals  and  shops  at  Gary,  as  well  as  all  the  light  and 
power  used  in  Gary  City.^^ 

The  Use  of  Open  Hearth  Gases. — The  gases  which  escape  from 
the  stack  of  an  Open  Hearth  furnace  have  an  average  temperature 
of  between  iioo°  and  1400°  C.  If  these  gases,  at  such  a  temper- 
ature, are  allowed  to  escape,  a  very  considerable  amount  of  heat 
energy  is  lost.  A  practice  has  accordingly  developed  in  some  plants, 
including  that  of  the  Illinois  Steel  Company,  of  passing  these 
gases  through  waste  heat  boilers.  It  has  been  found  that  a  75-ton 
Open  Hearth  furnace  with  a  properly  designed  boiler  will  develop 
350  boiler  H.  P.,  which  means  a  saving  of  about  twenty  tons  of 
coal  per  day.  The  larger  the  plant,  the  more  energy  of  this  type 
is  available,  and  the  more  furnaces  there  are,  the  more  nearly 
constant  is  the  resultant  supply  of  steam.  Pumps,  power  plants, 
and  other  machinery  can  be  run  on  such  "by-product  heat"  at  a 
very  low  cost.  It  can  also  supply  the  necessary  steam  for  thawing 
out  ore  and  limestone  piles  during  severe  winter  weather. 

The  Use  of  By-product  Oven  Gases. — These  gases  are  distinct 
from  those  which  are  given  off  by  the  coal  during  the  process  of 
carbonization.  The  by-product  ovens  consist  of  two  sections 
which  operate  alternately,  each  one  for  thirty  minutes,  the  idle 
section  being  heated  by  the  gases  of  combustion  from  the  active 
side.  Air  enters  at  the  bottom  of  the  active  section,  passes  through 
the  heated  "checker  work,"  and  then  joins  the  gas  for  combustion 
in  the  vertical  flues.  The  gases  of  combustion  next  pass  through 
horizontal  flues  near  the  top  of  the  oven  walls  to  the  opposite 
half  of  the  battery,  whence  they  pass  out  to  the  stack,  but  on  the 


'^Frorn  information  supplied  by  an  official  of  the  Steel  Corporation,  and 
by  Gary  Chamber  of  Commerce. 


257]  LOCATION  OF  DISTRICT SOURCES  OF  RAW  MATERIAL  ']'] 

» 

way  they  heat  up  the  "checker  work"  of  the  idle  section.  The 
effect  of  this  heating  of  the  air,  prior  to  its  entry  into  the  combus- 
tion chamber,  is  to  reduce  the  amount  of  fuel  necessary  to  main- 
tain a  constant  temperature.  Since  by-product  gas  is  the  fuel 
employed,  any  saving  means  a  larger  surplus  of  this  gas  for  other 
uses  or  for  sale. 

Other  Practices  For  Fuel  Economy. — An  interesting  device, 
whereby  one  product  which  is  hot  is  made  to  give  up  its  heat  to 
another  which  requires  it,  and  thereby  save  the  use  of  direct  heat, 
is  to  be  found  in  the  benzol  department  at  the  Wisconsin  Steel 
Company's  by-product  plant.  In  this  case  incoming  hot  absorbent 
oil,  which  carries  the  benzol  products  that  have  been  abstracted 
from  the  gas,  is  made  to  give  up  its  heat  to  outgoing  cool  oil  by  the 
insertion  of  pipes  bearing  the  latter  inside  those  carrying  the 
former. 

Another  device  for  reducing  costs  of  fuel  is  to  be  found  at  the 
Inland  Steel  plant.  The  electric  power  to  drive  one  of  the  rolling 
mills  is  obtained  from  a  dynamo  which  is  driven  by  the  steam  that 
has  been  used  to  drive  the  rolls  in  a  blooming  mill.  Normally  this 
exhaust  steam  is  able  to  perform  this  function,  but  in  case  addi- 
tional pressure  should  be  necessary,  connections  with  a  steam  plant 
have  been  provided. 

Care  is  taken  that  the  air  blast  in  the  furnaces  is  perfectly 
dry,  since  this  reduces  the  consumption  of  fuel  by  twenty  per 
cent,  compared  with  what  it  would  be  if  ordinary  air  were  used. 
This  practice  is  particularly  significant  in  the  Calumet  District, 
where  the  humidity  normally  is  high.  Careful  experiments  have 
shown  that  the  use  of  dry  air  also  increases  the  output,  owing  to 
the  fact  that  a  more  nearly  constant  temperature  can  be  main- 
tained.^^ 

These  practices,  although  adopted  in  most  iron  and  steel 
districts,  have  particular  significance  in  the  Calumet  District, 
where,  as  already  noted,  fuel  economy  is  so  vital  a  matter.  Con- 
sequently, a  careful  use  is  made  of  all  by-products  which  will 
serve  instead  of  coal  or  coke. 

Limestone 

Approximately  2,500,000  tons  of  limestone  were  imported 
into  the  Calumet  District  in  1923,  almost  all  of  which  was  received 

^^From  information  supplied  by  officials  of  the  steel  mills. 


78  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [258 

by  lake.  There  are  two  main  sources  for  this  material:  (i)  the 
neighborhood  of  Rogers  City  on  the  northern  coast  of  the  southern 
peninsula  of  Michigan,  and  (2)  Kelleys  Island  and  Marblehead, 
near  the  western  end  of  Lake  Erie  (Fig.  2).  Small  supplies  are 
obtained  from  McCook,  Illinois,  on  the  outskirts  of  Chicago. 

Suitable  fluxing  material  is  supplied  by  two  formations  oi 
limestone,  Corniferous  deposits  of  Devonian  Age  in  Ohio,  and  the 
Dundee  Oolite  in  Michigan.  These  varieties  contain  a  high  per- 
centage of  calcium  carbonate  and  have  a  very  low  silica  and 
alumina  content.  Consequently,  they  meet  the  requirements  for 
blast  furnace  operations.  The  dolomitic  Niagara  formations 
which  are  found  nearer  Chicago  contain  56%  of  calcium  carbonate 
and  44%  of  magnesium  carbonate;  the  latter  constituent  in  such 
abundance  makes  the  stone  unsuitable  for  fluxing  purposes.  It 
can,  however,  be  used  for  furnace  linings,  or  in  certain  processes 
of  steel  manufacture  where  a  highly  refractory  flux  is  necessary. 
The  Niagara  limestone,  which  abounds  in  the  vicinity  of  Chicago, 
is  unsuitable  also  on  account  of  the  clay  and  other  impurities  which 
are  imbedded  in  it.  Limestone  in  its  purest  form  makes  the  most 
desirable  fluxing  material,  and  the  great  masses  of  solid  stone 
which  are  being  quarried  in  northern  Michigan  and  northwestern 
Ohio  are  admirably  suitable  both  in  quality  and  quantity. 

Iron  ores  contain  considerable  impurities  such  as  silica, 
alumina,  etc.,  which  are  not  easily  fusible.  In  order  to  remove 
these  undesirable  materials,  it  is  necessary  to  alter  their  composition 
in  such  a  way  as  to  make  them  less  refractory.  The  calcium  of  the 
limestone  neutralizes  the  acids  in  these  materials,  and  the  quantity 
used  is  determined  by  the  amount  of  these  acid  impurities  in  the 
ore.  The  average  amount  of  limestone  used  per  ton  of  ore  is  about 
840  pounds.  In  Open  Hearth  furnaces  it  is  more  essential  than  in 
blast  furnaces  that  the  calcium  content  be  high,  the  silica  be  below 
1%,  the  alumina  be  under  1.5%  and  the  magnesia  be  less  than  5%. 
Blast  furnaces  can  utilize  satisfactorily  flux  with  a  higher  magnesia 
content  than  5%,  but  most  smelters  prefer  the  less  impure  forms.^^ 

Dundee  limestone  underlies  almost  the  whole  of  the  southern 
peninsula  of  Michigan,  but  it  only  outcrops  in  a  narrow  belt  along 
the  shore  of  Lake  Huron  from  Mackinaw  City  to  Alpena,  where  it 
is  over  two  hundred  feet  thick  (Plate  10).  It  is  almost  pure,  having 

'^From  information  supplied  by  the  officials  of  the  steel  mills. 


259]  LOCATION  OF  DISTRICT SOURCES  OF  RAW  MATERIAL  79 

in  places  a  calcium  content  of  98%.^*  The  larger  exposures,  and 
those  which  are  being  exploited  most,  occur  near  Rogers  City. 
There,  a  high  ridge  of  limestone  runs  parallel  to  the  shore  for 
about  five  miles.  This  bluff  overlooks  the  lake,  and  is  ideally 
located  for  bulk  shipments  by  water.  Calcite  Quarry,  operated  by 
the  Michigan  Limestone  and  Chemical  Company,  lies  along  the 
lakeside,  the  base  of  the  quarry  being  only  thirty  feet  above  the 
lake  and  the  working  face  from  thirty  to  one  hundred  feet  high. 
This  is  probably  the  largest  and  most  modernly  equipped  quarry 
in  the  world.^^  One  of  the  steel  companies  of  the  Calumet  District 
also  operates  a  large  quarry  in  this  area,  from  which  it  obtains  all 
its  fluxing  material.  Most  of  the  other  steel  companies  likewise 
get  the  bulk  of  their  limestone  from  this  area,  and  since  lake  freight- 
ers can  be  used,  the  costs  of  transportation  are  low.  The  average 
cost  of  this  material,  delivered,  is  about  $1.50  per  ton.  In  1922, 
the  limestone  production  of  Michigan  was  valued  at  $4,533,998. 
Much  of  this  sum  was  derived  from  the  sale  of  fluxing  material."' 
The  reserves  are  enormous,  and  at  the  present  rate  of  consumption 
the  supply  available  to  the  steel  industry  seems  more  than  adequate 
to  meet  all  future  needs.  Most  of  the  quarries  are  owned  by  large 
corporations  who  are  interested  in  the  production  of  limestone 
for  all  purposes.  The  cement  industry,  however,  is  particularly 
important,  since  the  same  qualities  of  stone  are  essential  for  this 
product  as  for  fluxing  material. 

The  conditions  at  Kelleys  Island  and  Marblehead,  Ohio, 
are  equally  good  for  the  cheap  production  of  high  grade  fluxing 
material  in  close  proximity  to  one  of  the  Great  Lakes  and  water 
transportation  facilities.  The  stone  lies  almost  at  the  surface, 
and  in  many  places  great  masses  of  limestone  are  exposed.  This 
type  of  limestone  contains  88%  of  calcium  carbonate,  and  is 
eminently  suitable  for  metallurgical  purposes.  The  deposits  vary 
from  60  to  no  feet  in  thickness,  and  the  upper  layers  are  exten- 
sively used  as  a  furnace  flux.  The  base  of  the  strata  is  apt  to  con- 
tain large  quantities  of  fish  teeth,  which  give  it  a  percentage  of 
phosphoric  acid  and  therefore  totally  exclude  it  from  use  as  a 
fluxing  material.''^ 

^^Mineral  Resources  of  Michigan,  Bull.  No.  21,  Series  XVII,  p.  159. 

^^Mineral  Resources  of  Michigan,  Bull.  No.  20,  Series  XVII,  pp.  250-51. 
'"Ibid.,  Bull.  No.  34,  Series  XXVIII,  p.  83. 

''^Limestone  Resources  of  Ohio,  Bull.  IV,  pp.  159-67. 


80  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT  [260 

The  fortunate  location  of  such  large  bodies  of  almost  pure 
limestone  close  to  the  shores  of  the  Lakes,  on  which  it  can  be 
transported  in  bulk  to  the  furnaces,  has  proved  of  immense  benefit 
to  the  Calumet  District.  No  railroad  shipment  is  necessary,  and 
this  material  can  be  handled  in  the  same  way  as  iron  ore. 

As  already  noted,  the  local  supplies  of  limestone  are 
not  suitable  as  flux.  Moreover,  the  deposits  are  less  extensive 
than  those  in  Michigan  and  Ohio  and  the  rock  is  more  expensive 
to  quarry.  There  are  deposits  of  suitable  material  in  central 
Illinois,  but  the  overburden  is  so  thick,  that  quarries  cannot  be 
opened  and  worked  successfully  in  competition  with  those  in 
Michigan  and  Ohio.  There  are  some  quarries  in  central  Illinois, 
as  for  example,  those  in  Vermilion  County,  but  apparently  none 
of  their  output  is  utilized  for  fluxing  purposes  in  the  Calumet 
District.'^  In  Indiana,  Bedford  limestone  occurs  in  strata  thirty 
to  seventy  feet  in  thickness,  and  much  of  the  waste  from  the  pro- 
duction of  building  stone  formerly  was  used  as  blast  furnace  flux. 
Railroad  freights,  however,  now  prevent  it  from  competing 
successfully  with  the  water  borne  product.  Furthermore,  costs 
of  production  are  increasing  at  present,  owing  to  the  exhaustion 
of  the  more  accessible  supplies,  and  the  thick  bed  of  clay  which 
overlies  much  of  what  remains.''^ 


''^Mineral  Resources  of  the  U.  S.,  Part  II  (1913),  p.  1535. 
'»/^/^.,  p.  1358. 


CHAPTER  III 

LOCAL    CONDITIONS    IN    THE    CALUMET    DISTRICT 
FAVORABLE  FOR  IRON  AND  STEEL  PRODUCTION 

The  Calumet  District,  with  its  abundance  of  vacant  flat  land 
in  large  blocks,  offers  excellent  and  adequate  sites  for  iron  and 
steel  mills.  Even  the  marshy  conditions  have  proved  to  be  an 
advantage,  since  the  waste  material  can  be  dumped  in  the  de- 
pressions. Plants  located  along  the  lake  shore  have  certain  advan- 
tages over  those  along  the  Calumet  River  in  regard  to  possible 
extension  of  area,  and  waste  disposal.  As  for  the  water  supply, 
both  of  these  locations  have  adequate  facilities. 

Owing  to  the  Nature  of  the  Industry  Large  Areas  of  Flat 
Land  Are  Required 

Owing  to  the  bulky  and  heavy  nature  of  the  commodities 
that  are  handled,  all  the  processes  of  iron  and  steel  manufacture 
are  confined  to  single  story  buildings.  A  modern  steel  plant  is 
made  up  of  a  number  of  departments,  each  requiring  roomy  and 
specialized  buildings.  As  a  result,  the  area  required  for  a  complete 
installation  is  large.  Each  department  is  an  entity  in  itself,  yet 
there  must  be  a  co-ordination  of  activities  in  order  to  produce 
the  finished  product.  Production  must  run  smioothly  in  each, 
since  any  dislocation  in  one  may  seriously  affect  operations  in 
others.  Cramped  conditions  are  highly  undesirable.  The  larger 
the  site,  the  more  opportunity  there  is  for  the  development  of 
smooth  working  conditions,  and  the  enlargement  of  a  plant  so 
located  presents  far  fewer  problems. 

The  several  stages  in  the  production  of  steel  are  sequential 
and  closely  inter-related.  In  order  to  economize  in  time  and 
expense,  re-heating  is  avoided  as  much  as  possible.  This  necessi- 
tates the  rapid  conveyance  of  the  molten  iron  from  the  blast 
furnaces  to  the  steel  plant.  In  the  same  way,  the  white  hot  ingots 
from  the  latter  are  conveyed  to  the  blooming  mill,  where  they  are 
either  rolled  at  once,  or  are  stored  in  the  "soaking  pits"  until  they 
are  required.  The  transference  of  these  materials  is  carried  out 
usually  by  the  plant  railroad  system.  Since  this  connects  with 
every  department,  a  large  amount  of  space  is  occupied  by  railroad 


82  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [262 

tracks  and  sidings.  Any  restriction  of  area  is  bound  to  affect 
adversely  the  arrangement  and  efficiency  of  this  vital  part  of  the 
equipment  of  a  steel  plant. 

In  order  to  avoid  delay  and  confusion,  it  is  essential  to  have 
everything  moving  in  one  direction,  from  start  to  finish.  This 
requisite  condition  has  been  met  best  at  the  Gary  plant  of  the 
Indiana  Steel  Company,  where  everything  moves  from  east  to 
west.  It  was  possible  to  arrange  for  this  at  Gary,  the  most  modern 
of  all  the  plants  in  the  Calumet  District,  because  of  the  large  area 
of  the  site,  and  the  great  care  with  which  the  whole  enterprise  was 
planned.  The  site  available  was  6,000  acres.  The  original  scheme, 
large  though  it  was,  provided  in  the  most  minute  details  for 
future  expansion.  As  a  result  all  additions  have  been  carried  out 
without  disturbance  to  the  older  portions  of  the  plant,  and  have 
been  fitted  into  the  organization  without  difficulty.  This  plant  is 
an  unusual  type,  since  it  was  conceived  as  a  large  scale  enterprise. 
Most  steel  mills  have  been  begun  in  a  small  way,  and  when  circum- 
stances justified  increased  production  the  plant  has  been  enlarged 
to  meet  the  requirements.  This  suggests  that  probable  expansion 
should  be  prepared  for  at  the  outset,  and  that  the  area  of  the  site 
should  be  gauged  according  to  this  scheme.  It  is,  however,  very 
difficult  to  foresee  in  any  particular  case  just  how  far  development 
will  proceed.  There  was  a  time  when  the  Illinois  Steel  Company 
considered  that  its  site  at  South  Chicago  was  large  enough  to  ac- 
commodate all  future  expansion.  Yet  before  that  plant  had  been 
in  existence  20  years,  it  was  realized  that  the  site  was  too  small, 
as  a  result  of  the  rapid  expansion  at  South  Chicago,  and  the 
limited  area  available,  and  the  new  plant  of  the  Steel  Corporation 
was  built  at  Gary.  To  enlarge  a  plant  again  and  again,  especially 
when  the  area  available  is  restricted,  is  very  difficult.  Under  such 
conditions  it  is  usually  well-nigh  impossible  to  keep  the  plant 
symmetrical,  and  so  the  regular  flow  of  the  materials  is  almost 
certain  to  be  impeded  somewhere.  No  large  spaces,  suitably 
located  in  central  Chicago  could  be  found  even  in  1880,  and  before 
that  date  steel  men  realized  that  the  wide,  empty,  spaces  of  the 
Calumet  District  offered  unrestricted  opportunities.  Neverthe- 
less, the  founders  of  most  of  the  present  plants  failed  to  foresee 
the  rapid  growth  that  has  taken  place,  so  that  most  of  these  plants 
already  have  nearly  reached  the  limit  of  their  expansion.  Hence, 
in  order  to  prepare  for  still  further  expansion,  the  various  com- 


263]         CONDITIONS  FAVORABLE  TO  IRON  AND  STEEL  INDUSTRY  83 

panics  are  continually  on  the  lookout  for  suitable  land,  and  are 
making  purchases  far  in  advance  of  early  requirements. 

Although  there  is  still  an  abundance  of  vacant  land  in  the 
Calumet  District,  all  of  it  is  by  no  means  suitably  situated  with 
regard  to  the  iron  and  steel  mills  which  are  located  there.  The 
acquisition  of  more  land  which  is  conveniently  situated  will  in 
most  cases  not  be  easy. 

There  can  be  no  doubt  of  the  superiority  in  this  respect  of 
lake  shore  locations.  Ownership  of  such  a  site  carries  with  it  the 
right  to  fill  in  the  lake  to  a  limit  of  depth  (that  of  navigable  water, 
twenty- two  feet),  which  is  fixed  by  the  Federal  Government. 
This  confers  an  enormous  advantage,  because  a  company  can  add 
very  considerably  to  its  total  acreage  by  such  filling.  It  is  less 
expensive  to  fill  in  the  water-front  than  it  would  be  to  buy  more 
land.  It  is  doubtful  whether,  in  most  if  not  all  cases,  land  could 
be  purchased  which  would  be  situated  as  conveniently  as  that 
which  can  be  built  out  into  the  lake,  because  the  latter  is  located 
just  where  it  is  needed  most  and  where  it  can  be  utilized  best. 
Large  parts  of  all  the  present  plants  which  are  located  along  the 
shore  are  built  upon  "made"  land.  In  Indiana  a  state  tax  of 
one  hundred  dollars  per  acre,  in  addition  to  the  cost  of  filling,  is 
the  only  charge  in  connection  with  the  acquisition  of  such  "made" 
land.  The  material  used  in  this  reclamation  consists  of  the  waste 
products  of  the  steel  industry,  mainly  slag.  Their  disposal  in  this 
way  is  both  convenient  and  a  source  of  profit.  In  this  respect, 
sites  along  the  Calumet  River  are  at  a  great  disadvantage.  The 
companies  located  there  can  use  their  waste  to  fill  in  the  low,  wet, 
places  on  their  land,  thus  improving  drainage  and  providing  an 
even  surface.  When  once  the  required  level  has  been  reached, 
however,  they  are  obliged  either  to  utilize  valuable  space  for  dump 
heaps  or  to  transport  the  waste  material  out  to  deep  water  in  the 
lake.  The  acquisition  of  more  land  is  only  possible  by  purchase, 
and  even  then  suitably  located  land  is  not  always  available.  Even 
when  such  land  can  be  bought,  the  price  is  very  high.  In  some  cases 
enormous  sums  are  demanded  for  vacant  lots  adjoining  the  prop- 
erty of  a  steel  company.  When  such  exorbitant  prices  of  vacant 
land  are  compared  with  the  costs  of  making  land  along  the  lake 
shore,  it  at  once  becomes  apparent  that,  in  a  rapidly  expanding 
industry  such  as  the  manufacture  of  iron  and  steel,  the  shore  loca- 
tions are  distinctly  preferable   to  river  front  sites.    A  specific 


84  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [264 

example  will  illustrate  this  point.  The  Wisconsin  Steel  Company 
urgently  needs  more  land.  Adjoining  its  mill  there  are  unoccupied 
lands  which  are  ideally  located  so  far  as  the  needs  of  this  company 
are  concerned,  but  which  cannot  be  bought  at  any  reasonable 
price.  Meanwhile,  the  company  is  expanding  to  the  limit  of  its 
capacity.  Yet  a  large  section  of  its  property  between  99th  and 
io6th  Streets  is  utilized  as  a  dump  for  slag  and  other  waste 
products. 

Certain  disadvantages  are  associated  with  lakeside  locations. 
A  number  of  railroad  lines  hug  the  lake  shore  as  they  traverse 
the  Calumet  District.  These  restrict  expansion  landward,  make 
access  to  the  mills  less  convenient,  and  even  cut  certain  properties 
into  two  parts  (Fig.  i). 

In  the  case  of  the  Inland  Steel  plant  at  Indiana  Harbor, 
the  furnaces  are  separated  from  the  older  established  steel  mills 
by  the  tracks  of  the  following  railroads:  Elgin  Joliet  and  Eastern, 
Baltimore  and  Ohio,  Pennsylvania,  and  New  York  Central.  In 
order  to  transfer  hot  metal  from  the  blast  furnaces  to  the  Open 
Hearth  plant  on  the  south  side  of  the  tracks,  it  has  been  necessary 
to  construct  tunnels,  through  which  the  ladles  are  carried  on  the 
company's  own  railroad  system.  This  has  added  considerably  to 
the  costs  of  production. 

A  similar  tunnel  was  constructed  at  what  is  now  the  plant  of 
the  Youngstown  Sheet  and  Tube  Company.  This  serves  a  double 
purpose.  The  company's  by-product  coke  plant  is  situated  on  the 
south  side  of  the  same  group  of  railroads,  and  the  gas  and  tar  are 
conveyed  to  the  furnaces  by  pipes  which  pass  through  this  tunnel. 
Pedestrians  also  use  the  tunnel  when  entering  or  leaving  the  plant, 
and  thus  avoid  the  danger  of  crossing  a  number  of  busy  railroads. 
All  vehicular  traffic,  however,  must  cross  the  tracks  in  order  to 
enter  or  leave  the  works.  All  the  coal  which  is  brought  to  this  mill 
by  boat  is  unloaded  at  the  ore  docks  into  railroad  cars,  for  con- 
veyance to  the  store  piles  beside  the  coke  plant.  It  would  be  much 
cheaper  and  more  expeditious  to  utilize  a  bridge  conveyor,  but 
the  railroad  companies  will  not  permit  one  to  be  built  over  their 
tracks.   This  is  a  very  definite  disadvantage  to  the  steel  company. 

At  South  Chicago,  the  Elgin  Joliet  and  Eastern  Railroad 
tracks  run  alongside  the  property  of  the  Iroquois  works  and 
separate  them  from  a  tract  of  vacant  land,  which  has  a  good 
water  front  and  which  adjoins  Ewing  Avenue,  one  of  the  main 


265]         CONDITIONS   FAVORABLE  TO   IRON   AND  STEEL  INDUSTRY  85 

business  streets.  This  piece  of  land  is  useless  to  the  Iroquois 
Company  on  account  of  its  small  size,  and  because  access  to  it 
would  necessitate  the  construction  of  a  tunnel  under  the  railroad. 
To  do  this  would  involve  the  sacrifice  of  too  much  land  which  is 
occupied  by  buildings,  and  a  capital  outlay  much  greater  than  the 
small  addition  would  justify.  Were  it  not  for  the  railroad  this  land 
could  be  readily  combined  with  the  already  crowded  site.  Land- 
ward expansion  is  impracticable,  and  the  Company  has  extended 
its  site  lakeward  to  the  limit  of  its  riparian  rights,  so  the  further 
enlargement  of  this  plant  is  almost  impossible. 

At  Gary,  the  Indiana  Steel  Company  was  sufficiently  in- 
fluential and  wealthy  to  be  able  to  move  three  sets  of  railroad 
tracks  back  from  the  lake  shore  to  suit  its  own  convenience.  At 
the  same  time  it  elevated  them  so  that  there  could  be  unrestricted 
movement  in  and  out  of  the  mills.  Thus  the  disadvantages  which 
are  experienced  at  the  Indiana  Harbor  plants  were  obviated. 
This  company  owns  ample  land  along  the  shore  to  provide  for  its 
probable  expansion  for  many  years  to  come. 

One  particular  problem  associated  with  the  size  of  sites  in  the 
Calumet  District,  particularly  in  the  case  of  those  of  restricted 
area,  is  the  necessity  for  adequate  space  to  store  winter  supplies 
of  ore,  fuel,  and  limestone.  These  storage  piles  form  an  imposing 
feature  at  all  the  plants  (Plate  ii).  The  enormous  quantities  of 
these  bulky  commodities  which  must  be  accumulated  by  the  end 
of  each  navigation  season  would  impress  even  a  casual  observer. 
It  would  be  difficult,  if  not  impossible,  to  secure  sufficiently  large 
sites  within  the  congested  areas  of  a  large  city  to  admit  of  so  much 
land  being  utilized  in  this  way.  Should  it  be  necessary  to  obtain 
additional  supplies  of  ore  during  the  period  of  closed  navigation, 
railroads,  with  their  much  higher  freight  charges,  would  provide 
the  only  available  means  of  transportation.  Since  cheap  ore  is 
essential  to  the  success  of  the  iron  and  steel  industry  in  the  Calumet 
District,  the  importance  of  having  ample  storage  space  is  evident. 

The  disposal  of  slag,  which  is  produced  in  such  enormous 
quantities,  represents  one  of  the  outstanding  problems  of  those 
companies  which  are  located  along  the  Calumet  River.  It  is  not 
so  serious  at  present  to  those  whose  plants  occupy  lake  shore  sites 
since,  as  already  noted,  they  can  use  slag  to  build  land  out 
into  the  lake  up  to  their  riparian  limits.  The  usual  plan  adopted 
to  this  end  is  to  enclose  a  portion  of  the  lake  area  which  is  destined 


86  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [266 

to  be  filled.  Molten  slag  is  then  run  directly  from  the  slag  notch 
of  the  furnace  into  this  enclosure.  This  is  convenient  and  permits 
inexpensive  filling.  Furthermore,  it  is  necessary  because  no  molten 
slag  may  be  dumped  into  the  open  lake,  since  on  coming  in  con- 
tact with  the  water  the  slag  disintegrates  and  contaminates  it 
over  a  wide  area.  Only  cold  slag  therefore  can  be  used  to  fill  non- 
enclosed  'areas.  When  the  lake  shore  companies  have  built  out 
their  shore  lands  to  the  limit  permitted,  they  will  be  in  much  the 
same  predicament  as  those  along  the  river,  except  that  they  are 
located  more  conveniently  to  load  the  material  on  barges  and  dump 
it  out  in  the  lake  at  a  distance  from  shore. 

As  already  noted,  the  Wisconsin  Steel  Company,  whose  site 
along  the  Calumet  River  is  limited  to  142  acres,  is  obliged  to 
utilize  a  large  area  of  its  property  as  a  slag  dump.  The  remainder 
of  the  site  is  almost  entirely  occupied  by  the  plant,  and  each  addi- 
tion to  the  latter  is  made  with  increasing  difficulty,  ov/ing  to  lack 
of  adequate  space.  Slag  disposal  is  a  very  real  problem,  and 
smelting  operations  have  to  be  adjusted  to  meet  this  difficulty, 
particularly  with  reference  to  the  use  of  limestone. 

The  composition  of  the  slag  is  vital  to  the  production  of  iron. 
"Its  degree  of  fusibility  governs  the  length  of  time  that  it  will  be 
exposed  to  carbon  for  the  absorption  of  the  same,  and  the  per- 
centage of  bases  will  determine  the  affinity  for  sulphur  and  silica. 
In  smelting  rich  ores  the  slag  must  be  kept  more  refractory  than 
when  working  lean  ores,  as  the  degree  of  basicity  determines  the 
fusibility  and  also  its  ability  to  carry  off  sulphur.  Slag  containing 
a  high  percentage  of  lime  and  low  magnesia  will  cause  the  slag  to 
slake  if  on  the  basic  side."^  Therefore,  since  slag  is  so  important 
in  the  production  of  iron,  little  can  be  done  to  alter  its  composition 
without  affecting  the  grade  produced.  The  best  flux  is  almost 
pure  calcium  carbonate,  but  the  resulting  slag,  when  cold,  is  soft 
and  very  limy.  Such  a  slag  is  useless  to  construction  companies, 
who  require  large  amounts  of  ballast,  concrete,  and  roofing  mater- 
ial. They  will  take  only  a  hard  slag  which  will  wear  like  stone,  mix 
as  well  in  concrete,  build  solid  roads,  and  so  on.  In  order  to  pro- 
duce a  slag  which  can  be  sold,  the  Wisconsin  Company  uses  a 
mixture  of  20%  dolomite  and  80%  calcite  limestone  in  its  furnaces. 

'Quarrie,  B.  D.,  "Operation  of  a  Blast  Furnace,"  Iro7i  Ores  of  Lake  Su- 
perior (1923),  pp.  121-22. 


267]        CONDITIONS  FAVORABLE  TO  IRON  AND  STEEL  INDUSTRY  87 

This  makes  a  satisfactory  fluxing  material,  gives  a  clean  separation 
in  the  hearth  of  the  furnace,  and  produces  a  hard  slag  which 
actually  wears  better  than  stone,  as  ballast  material.  Such  a  mix- 
ture does  not  "gum  up"  the  furnace  as  one  would  do  which  con- 
tained a  larger  percentage  of  dolomite. 

The  Illinois  and  Indiana  Steel  companies  have  an  additional 
outlet  for  their  immense  slag  production.  The  Buffington  Portland 
Cement  Company  was  founded  in  order  that  this  waste  product 
could  be  utilized  in  a  more  profitable  manner.  Two  qualifications 
are  essential  in  order  that  the  slag  may  be  used  in  the  manufacture 
of  Portland  cement.  It  must  not  contain  more  than  4%  of  mag- 
nesia, and  it  must  be  cooled  instantly  and  completely,  in  sufficient 
water  to  cause  it  to  granulate.  The  latter  gives  the  cement  its 
hardening  properties.  The  advantage  of  an  abundance  of  cool 
water  is  obvious.^ 

Portland  cement  is  normally  a  calcined  and  ground  mixture 
of  limestone,  chalk  or  marl,  and  clay  or  shale.  At  Buffington, 
finely  ground  slag  replaces,  in  part,  the  limestone.  Abundant 
supplies  are  easily  obtained,  either  from  the  South  Chicago  or 
Gary  mills,  since  the  Elgin  Joliet  and  Eastern  Belt  Railroad  con- 
nects the  three  plants.  The  United  States  Steel  Corporation  is 
preparing  to  spend  three  million  dollars  in  the  immediate  future 
on  improvements  and  additions  to  the  Buffington  plant.  It  has 
planned  to  construct  a  harbor  and  dock  for  the  handling  and 
storage  of  limestone,  slag,  and  coal,  and  for  the  shipment  of  cement 
by  lake.  An  additional  cement  plant  of  the  latest  type  also  will  be 
constructed.^ 

There  are  a  number  of  other  ways  in  which  slag  could  be 
utilized  to  advantage,  provided  the  iron  and  steel  companies 
would  go  to  the  expense  of  providing  the  necessary  equipment. 
That  they  have  not  done  so  yet  is  evidence  that  the  problem  of 
slag  disposal  has  not  yet  reached  the  critical  stage. 

"Eisen  Portland  Cement"  is  being  made  extensively  in  Europe. 
This  is  a  mixture  of  35%  ground  slag  and  65%  Portland  cement. 
This  product  is  almost  as  strong  as  Portland  cement  itself,  and  is 
considered  to  be  even  more  resistant  to  the  action  ofsea  water  and 
alkali.  There  would  seem  to  be  a  demand  for  such  a  cement  in  the 


^Quarrie,  B.  D.,  he.  cit. 

^Chicago  Tribune,  February  12,  1925, 


88  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [268 

United  States  sufficient  to  justify  such  a  product,  and  the  re- 
sources of  the  Calumet  District  make  it  a  suitable  center  for  its 
manufacture.^ 

Slag,  mixed  with  lime,  will  also  make  good  bricks  for  building 
purposes.  Bolckon,  Vaughan  and  Company  formerly  made  these 
"limeslag"  bricks,  at  Cleveland.  They  consisted  of  88%  ground 
granulated  slag  and  12%  hydrated  lime.  This  mixture  was  made 
into  a  stiff  paste,  put  in  moulds,  and  then  passed  through  200-ton 
presses.  After  being  steam  dried,  a  perfectly  formed,  uniform, 
strong,  brick  was  obtained.  Careless  manufacture  brought  them 
into  disfavor,  and  their  production  ceased.  If  made  properly, 
they  form  a  very  serviceable  brick,  and  their  extensive  production 
would  call  for  large  supplies  of  slag.^  Experiments  have  shown 
that  a  better  brick  of  this  type  can  be  produced.  They  are  made  in 
the  same  way,  except  that  12%  of  cement  replaces  the  hydrated 
lime.  These  bricks  do  not  require  to  be  steam  dried.  They  dry 
satisfactorily  in  the  open  air  and  are  ready  for  use  almost  im- 
mediately, although  storage  for  some  three  months  improves  their 
quality.  They  are  very  hard  and  strong  and  make  excellent 
building  material.^ 

Basic  slag  makes  an  excellent  fertilizer.  As  such,  its  value  is 
well  known  in  Europe,  where  it  is  employed  extensively  for  this 
purpose.  When  applied  in  conjunction  with  steamed  bones,  it 
forms  a  useful  source  of  phosphoric  acid.  The  basic  lining  of  a 
Bessemer  converter  yields  a  phosphorus-free  metal  and  a  highly 
phosphatic  slag.  If  the  latter  is  ground  fine  an  excellent  fertilizer 
is  produced.  Open  Hearth  slag  yields  a  lower  percentage  of 
phosphorus,  and  in  the  Calumet  District,  where  the  ores  used 
have  a  low  phosphorus  content,  such  slag  has  little  fertilizing 
value.  The  usual  yields  in  England  and  Germany  are  higher,  as  a 
result  of  a  difference  in  the  phosphorus  content  of  ore  which  is  used. 
In  the  Calumet  District,  only  the  basic  slag  from  Bessemer  con- 
verters could  be  utilized  profitably  for  agriculture.  On  the  other 
hand,  the  use  of  basic  slag  in  American  agriculture  is  very  restrict- 
ed, and  most  of  that  so  employed  is  imported.  Rock  phosphates 
abound   in    the   United   States,    and    fertilizer   can    be   obtained 

*Iron  Age,  April  17,  1924,  p.  11 5 2. 

^Iron  and  Coal  Trades  Review,  November  9,  1923,  pp.  1689-90. 

^Ibid.,  p.  1691. 


269]         CONDITIONS   FAVORABLE  TO   IRON   AND  STEEL  INDUSTRY  89 

more  readily  from  these.  However,  this  use  for  basic  slag  offers 
a  means  of  disposing  of  at  least  some  of  the  large  tonnage  pro- 
duced. 

The  gases  leaving  the  blast  furnace  carry  with  them  compara- 
tively large  quantities  of  fine  material  consisting  of  ore,  coke,  and 
limestone.  If  a  furnace  is  working  irregularly,  the  particles  are  apt 
to  be  much  coarser  than  otherwise  would  be  the  case.  Normally, 
the  iron  content  of  this  flue  dust  is  approximately  the  same  as  the 
grade  of  ore  being  used.  Consequently  it  is  worth  while  to  collect 
this  material  from  the  washers,  but  considerable  space  is  required 
for  its  storage.  The  average  production  of  flue  dust  is  about 
two  hundred  pounds  per  ton  of  iron  produced,  and  until  a  few  years 
ago  this  was  wasted.  Now  most  plants  in  the  Calumet  District 
have  some  method  for  reclaiming  this  waste  material  and  for  re- 
turning it  to  the  furnaces.  To  put  it  back  in  the  form  of  dust 
would  be  useless,  since  it  would  be  blown  out  again  almost  im- 
mediately. The  dust  carries  8%  to  io%  of  carbon,  and  this  is  the 
medium  by  which  it  is  made  to  coagulate.  One  method  is  to  ignite 
the  carbon  content  in  a  Sintering  plant,  and  the  resulting  heat 
causes  the  mass  to  fuse  into  pieces  as  large  as,  or  larger  than, 
marbles.  These  can  be  fed  back  into  the  furnace  successfully. 
Another  method  is  to  make  briquettes  by  passing  moulds  con- 
taining the  dust  through  a  furnace  heated  to  25oo°F.  This  tem- 
perature fuses  the  briquettes,  while  the  carbon  is  consumed. 
The  resulting  product  is  a  good  substitute  for  hard  ore,  as  a  me- 
dium for  facilitating  the  regular  working  of  a  furnace  using  fine 
grained  Mesaba  ores.'^  ^Yhere  one  of  these  methods  is  not  em- 
ployed, all  this  material  is  wasted.  Moreover,  it  has  to  be  dumped 
with  the  slag,  and  its  disposal  becomes  a  more  or  less  serious 
problem,  as  the  site  of  a  particular  plant  becomes  more  and  more 
congested. 

An  Adequate  Supply  of  Water  Is  Available  For  All  the 
Iron  and  Steel  Plants 

The  steel  industry  could  not  function  without  an  enormous 
supply  of  clean,  soft  water.  This  is  utilized  for  steam,  for  cooling, 
and  for  gas  washing  purposes,  and  the  requirements  amount  to 
many  millions  of  gallons  per  day.    Any  plant  located  on  the  lake 

'Crowell  and  Murray,  Iron  Ores  oj  Lake  Superior  (1923),  pp.  122-23. 


90  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [2/0 

shore  or  along  the  Calumet  River  can  be  sure  of  an  adequate  supply. 
It  is  a  comparatively  easy  and  inexpensive  operation  to  draw  the 
necessary  volume  of  water  from  either  of  these  sources.  It  would  be 
far  more  expensive  to  obtain  the  same  quantities  from  wells,  and 
the  supply  probably  would  be  much  less  certain.  Hence  the 
matter  of  water  supply  will  restrict  the  expansion  of  the  industry 
in  the  Calumet  District  to  areas  which  are  contiguous  to  either  the 
lake  or  the  Calumet  River. 

Detailed  figures  of  the  total  consumption  of  water  by  all  the 
companies  are  not  available,  but  sufficient  data  can  be  given  to 
indicate  the  importance  of  location  with  reference  to  an  ample 
water  supply.  The  large  volume  is  due  to  the  necessity  of  having 
running  water  in  all  parts  of  the  plant.  The  Inland  Steel  Company 
is  one  of  the  larger  consumers.  In  Plant  No.  2,  located  south  of 
the  railroad  tracks,  15,000,000  gallons  are  required  daily.  The 
new  plant  (No.  i),  will  require  very  much  more  when  intended 
developments  have  been  completed.  The  present  pumping  equip- 
ment of  No.  I  plant  is  as  follows — 3  pumps  with  a  capacity  of  3,500 
gallons  per  minute,  2  of  4,200  gallons  per  minute,  and  5  of  8,000 
gallons  per  minute.  These  10  pumps  are  driven  electrically,  and 
can  draw  approximately  85,000,000  gallons  from  the  lake  every 
twenty-four  hours.  This  makes  a  total  pumping  capacity  of 
100,000,000  gallons  daily  for  the  two  plants.  In  191 9  the  daily 
consumption  averaged  67,000,000  gallons  per  day,  which  were 
distributed  through  the  plants  in  a  series  of  water  mains  having  a 
diameter  of  thirty-six  inches.^  Since  then,  the  consumption  has 
been  largely  increased  as  a  result  of  additions  to  the  plant,  and 
when  the  new  600-ton  blast  furnace  comes  into  operation  further 
increases  will  take  place. 

The  Illinois  and  Indiana  Steel  companies,  with  their  large 
plants  at  South  Chicago  and  Gary,  use  much  more  than  the  Inland 
Steel  Company.  One  official  estimated  it  at  something  above  the 
amount  used  daily  in  the  city  of  Chicago  for  municipal  purposes 
(800,000,000  gallons).  Since  the  Illinois  and  Indiana  Steel  com- 
panies together  have  seven  times  as  many  blast  furnaces  as  the 
Inland  Steel  Company,  and  since  their  other  equipment  is  cor- 
respondingly more  extensive,  the  foregoing  estimate  seems  not 
unreasonable. 

*(a)  Iron  Age,  July  10,  1919. 
(b)   Verified  by  the  officials  of  the  company  in  a  personal  interview. 


271]  CONDITIONS   FAVORABLE   TO   IRON   AND   STEEL   SUPPLY  9I 

The  Youngstown  Sheet  and  Tube  Company  draws 
150,000,000  gallons  daily  from  the  lake,  while  the  Federal  Furnace 
Company  uses  18,000,000  gallons.  Steel  plants  require  much  more 
water  than  those  which  are  exclusively  blast  furnace  plants,  owing 
to  the  more  diversified  activities  carried  on  in  them. 

The  advantage  of  location  near  Lake  Michigan  can  be  recog- 
nized clearly  when  conditions  in  the  Calumet  District  are  com- 
pared with  those  of  inland  locations.  At  Youngstown  the  steel 
plants  are  strung  out  along  the  river  from  which  they  draw  their 
supplies  of  water.  At  Canton,  Ohio,  where  no  river  or  lake  supply 
is  available,  the  United  Alloy  Company  has  been  obliged  to  bore 
eleven  artesian  wells  to  obtain  its  requirements.  Such  a  means  of 
supply  is  much  more  costly,  both  to  install  and  to  maintain,  than 
the  simple  equipment  involved  in  drawing  water  from  the  lake, 
and  the  supply  is  much  more  uncertain.  The  water  which  is 
obtained  from  these  wells  is  so  hard  that  the  company  is  obliged 
to  soften  it  artificially  before  it  can  be  used.  On  the  other  hand, 
the  water  from  Lake  Michigan  can  be  used  in  its  natural  con- 
dition. 

The  presence  of  Lake  Michigan  certainly  has  solved  the  water 
problem,  and  these  illustrations  are  suflicient  to  show  that  an 
abundant  supply  is  very  essential  to  the  iron  and  steel  industry. 
In  this  respect  the  Calumet  District  has  very  distinct  advantages, 
owing  to  its  lakeside  location. 


CHAPTER  IV 

LABOR  CONDITIONS 

Labor  supply,  urban  expansion,  and  industrial  development 
are  related  so  closely  one  to  another,  that,  as  a  rule,  the  growth 
of  any  one  of  them  stimulates  that  of  the  others.  In  its  broadest 
sense  industry  is  dependent  upon  labor,  and  vice  versa,  so  that  a 
progressive  industrial  area  is  extensively  urbanized.  Most  in- 
dustries have  had  their  beginnings  in  places  where  a  surplus 
population  could  be  drawn  upon  to  supply  the  necessary  labor. 
The  only  alternative  has  been  to  import  the  requisite  labor  by 
creating  sufficiently  attractive  conditions. 

Labor  Supply 

Throughout  its  industrial  history  the  Calumet  District  has 
been  on  the  margin  of  a  populous  and  rapidly  growing  city,  with 
the  result  that  it  has  been  possible  to  bring  labor  to  the  iron  and 
steel  industry  easily.  When  the  first  steel  plant  was  located  at 
the  mouth  of  the  Calumet  River,  the  particular  site  for  it  was 
chosen  because  it  was  beyond  the  residential  sections  of  Chicago. 
Industrial  sites  farther  up  the  river  were  chosen  for  similar 
reasons.  Their  original  labor  supply  was  drawn  from  the  city, 
but  in  course  of  time  much  of  the  contiguous  area  has  become  more 
or  less  urbanized.  Chicago  has  spread  rapidly  and  in  the  process 
has  absorbed  South  Chicago.  With  this  city  growth,  a  wide 
variety  of  other  industries  have  come  into  existence  in  the  Calumet 
District,  which  have  further  attracted  labor  and  stimulated  the 
building  of  houses  near  the  industrial  sites,  since  it  is  more  satis- 
factory if  workers  are  housed  conveniently  near  to  their  work. 

The  more  distant  mills  at  Indiana  Harbor  and  Gary  can  now 
be  reached  readily  from  the  city,  owing  to  good  railroad  facilities, 
but  prior  to  1910  these  facilities  were  little  developed.  Large 
scale  urbanization  schemes,  therefore,  were  required  in  order  to 
attract  labor  to  the  areas  where  it  was  most  needed.  The  growing 
urbanization  of  recent  years  has  been  the  means  of  attracting,  of 
retaining,  and  of  building  up  a  stable  industrial  population. 

Many  nationalities  can  be  found  in  and  around  the  iron  and 
steel  mills.  In  one  plant  there  are  sixteen,  and  notices  are  posted 
in  several  different  languages.    The  executive  work  and  the  more 

92 


273]  LABOR   CONDITIONS  93 

skilled  artisan  labor  are  carried  on,  for  the  most  part,  by  Americans, 
but  the  bulk  of  the  semi-skilled,  and  unskilled  labor,  is  done  by 
foreigners.  Men  of  similar  nationalities,  such,  for  example,  as 
Poles,  Czechs,  Italians,  Austrians,  Mexicans,  and  Germans,  are 
drawn  into  the  same  sorts  of  jobs.  Thus,  as  a  result,  most  of  the 
men  employed  in  the  rolling  mills  tend  to  be  Poles,  the  furnace  men 
are  largely  Austrians,  the  railroad  men,  Italians,  and  so  on.  This 
has  a  disadvantage  from  the  administrative  point  of  view,  in  that 
the  individual  members  of  these  groups  tend  to  support  one 
another  and  make  it  difficult  to  trace  the  cause  of  minor  troubles. 
Consequently,  efforts  are  made  to  mix  the  nationalities  so  far  as  it 
is  practicable.  Most  smelters  prefer  to  employ  Americans,  but  it 
is  only  in  the  last  few  years,  since  the  adoption  of  the  eight-hour 
day,  and  the  general  improvement  of  working  conditions,  that  these 
have  been  attracted  to  the  industry  in  any  considerable  number. 
Mexicans  and  negroes  are  least  desired  of  all  on  account  of  their 
irregular  habits  and  lack  of  stamina,  although  there  are  many 
individual  exceptions  to  this  general  rule.  Most  of  the  foreigners 
will  submit  to  longer  hours,  since  they  are  concerned  mainly  with 
earning  as  much  money  as  possible,  regardless  of  health  and 
comfort. 

Industrial  Expansion  Has  Necessitated  Urban  Development 

With  the  improvement  of  means  of  local  transportation,  the 
area  has  increased  from  which  a  particular  industry  may  con- 
veniently draw  its  workers,  so  that  the  modern  tendency  is  to 
extend  the  residential  districts  farther  and  farther  away  from  the 
industrial  plants. 

West  of  Lake  Calumet,  residential  districts  have  developed 
that  resemble  those  along  the  Calumet  River,  especially  since  the 
establishment  of  fabricating  plants  has  encouraged  labor  to  settle 
in  their  immediate  neighborhood.  The  gaps  between  communities 
have  been  gradually  reduced,  owing  to  the  increase  in  the  popu- 
lation consequent  upon  the  growth  of  the  iron  and  steel  industries, 
and  the  rise  of  other  industries.  The  expansion  of  Chicago  south- 
ward has  tended  to  fill  the  gaps  north  and  west  of  the  Calumet 
District.  The  relation  between  the  industrial  and  residential 
sections  can  be  recognized  clearly.  Westward  expansion  of  resi- 
dential districts  has  been  encouraged  by  the  greater  attractive- 
ness of  those  sections  farthest  removed  from  the  factories.    Rail- 


94  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [274 

roads  and  street  cars,  as  well  as  automobiles,  have  made  it  con- 
venient for  people  to  live  relatively  far  away  from  the  mills. 

The  eastern  section  of  the  Calumet  District  has  developed 
rather  differently  from  the  western  section.  The  industries  were 
planted  where  the  population  was  very  sparse,  where  means  of 
communication  and  the  amenities  of  life  had  to  be  developed 
rapidly  in  order  to  attract  and  keep  labor.  Since  urban  communi- 
cations were  not  good  in  most  of  these  sections,  the  residential 
development  took  place  around  the  Individual  plants.  As  the  in- 
dustries grew,  and  new  ones  came  into  existence,  the  necessary 
improvements  in  transportation  facilities  were  provided,  with  the 
result  that  there  has  been  a  steady  expansion  of  residential  dis- 
tricts at  considerable  distances  from  the  center  of  the  community 
to  which  they  belong.  Hammond  has  developed  around  the  steel 
car  shops  located  there,  and  modern  facilities  have  increased  its 
capacity  for  becoming  a  residential  area  for  workers  in  a  number 
of  the  neighboring  steel  mills.  Indiana  Harbor  and  East  Chicago 
grew  up  with  the  steel  plants  and  their  associated  industries. 
Whiting  owes  its  existence  and  development  to  the  oil  interests. 

A  similar  condition  may  be  noted  in  its  earliest  stages  at  Ford 
City.  Henry  Ford  recently  erected  a  large  plant  at  some  distance 
from  South  Chicago,  in  the  center  of  a  large  vacant  area.  The 
workers  are  drawn  from  considerable  distances.  A  part  of  the  area 
adjoining  the  plant  has  been  subdivided,  and  the  building  of  a 
city  to  house  the  employees  of  this  factory  has  been  commenced. 
Any  new  industries  which  may  locate  in  the  neighborhood  obvious- 
ly will  stimulate  this  city  growth. 

The  steel  corporations  have  done  much  to  provide  houses  and 
to  encourage  urban  development  around  their  plants,  in  order  to 
stabilize  labor.  The  outstanding  example  of  how  an  industrial 
enterprise  can  Influence  the  settlement  and  urbanization  of  an 
area  Is  to  be  seen  In  the  case  of  Gary.  In  less  than  twenty  years, 
a  city  of  imposing  proportions  has  arisen,  In  what  was  formerly  a 
desolate  waste  of  dunes  and  marshes,  with  no  natural  attractions 
whatever  for  residential  purposes.  The  steel  Industry  was  re- 
sponsible for  the  change.  The  Gary  steel  mills  began  operations 
on  a  very  large  scale,  and,  therefore,  the  initial  labor  force  was 
numerous.  To  maintain  this  force,  the  Steel  Corporation  took  a 
lively  interest  in  the  planning  and  the  laying  out  of  a  model  In- 
dustrial city  in  a  place  where  few  would  have  dreamed  a  city 


275]  LABOR  COXDITIOXS  95 

would  be  built.  The  need  was  pressing.  Almost  before  the  plant 
had  fairly  started  to  make  steel,  its  labor  force  numbered  about 
15,000.^  Hence  the  very  rapid  growth  of  Gary.  The  Steel  Cor- 
poration provided  large  funds  to  assist  the  early  developments. 
As  a  result,  the  plan  of  the  city  was  co-ordinated  with  that  of  the 
steel  mills  to  which  it  owed  its  existence.  The  success  of  the  proj- 
ect was  undoubtedly  due  to  the  enormous  resources  back  of  it, 
but  once  well  launched,  development  was  natural. 

The  following  citation  from  the  Iron  Age  illustrates  what 
had  been  accomplished  by  1909.  "The  city  of  Gary  was  therefore 
laid  out  just  south  of  the  steel  works,  upon  an  orderly  plan  and 
comprehensive  scale,  taking  into  account  its  probable  growth  to 
metropolitan  proportions.  Already  Gary  has  an  estimated  popu- 
lation of  15,000  before  the  plant  has  fairly  started,  and  is  provided 
with  an  adequate  waterworks  system,  whose  permanent  water 
supply  will  be  drawn  from  Lake  Michigan  through  a  tunneled 
intake  now  under  construction;  an  electric  lighting  plant,  an  elec- 
tric street  railway  and  a  complete  sewerage  system.  .  .  .  The 
main  street  has  its  northern  terminus  at  the  entrance  to  the 
steel  plant.  .  .  .  Two  lines  of  railroad,  the  Baltimore  and 
Ohio,  and  the  Central  Indiana  and  Southern,  ran  through  the 
center  of  what  is  now  the  mill  site.  Over  forty  miles  of  new  rail- 
road were  built,  and  both  the  above  roads  were  re-established  by 
the  corporation  on  rights  of  way  passing  between  the  town  and  the 
mills.  The  tracks  at  this  point  are  elevated  to  allow  an  unob- 
structed entrance  to  the  works.  .  .  .  The  entire  plan  embodies 
an  adjustment  of  structural  arrangement  to  the  convenience  of 
local  transportation,  rather  than  to  alignment  with  compass  lines, 
and  constitutes  not  only  a  departure  from  precedent  but  is  pro- 
ductive of  an  unusual  degree  of  flexibility  in  the  interchange  of 
trafiic."2 

During  the  first  six  years  of  its  existence,  housing  facilities 
were  far  short  of  requirements,  and  many  employees  were  forced 
to  live  in  surrounding  towns.  In  191 1,  nearly  one  thousand 
homes  were  built,  and  fifteen  hundred  were  planned  in  191 2. 
After  the  early  years,  the  real  estate  dealers  began  big  develop- 
ment schemes.   Addition  after  addition  was  made  to  the  city,  and 

^Iron  Age,  January  7,  1909. 
^Iron  Age,  January  7,  1909. 


96  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [276 

the  population  increased  by  leaps  and  bounds.  Broadway,  the 
main  commercial  street,  extends  north  and  south  for  five  miles, 
and  the  built  up  area  has  extended  south  for  the  same  distance, 
although  with  decreasing  density  as  the  distance  from  the  center 
of  the  city  increases.  In  1910,  the  population  was  16,802;  in  1920, 
55,378;  in  1924,  73,837.  These  figures  indicate  the  enormous 
growth  in  eighteen  years,  for  in  1906  the  area  was  practically 
unpopulated.  The  Indiana  Steel  Company  generates  the  bulk  of 
power,  6600  volts,  which  is  used  in  the  city  for  commercial  and 
industrial  purposes.  It  supplies  washed  blast  furnace  gas 
to  operate  thirty-four  3,000  H.  P.  engines,  which  in  turn  generate 
2500  K.  W.,  also  for  use  in  the  city.  It  is  no  exaggeration  to  say 
that  the  whole  life  of  the  community  is  bound  up  with  the  steel 
mills.^  Gary,  then,  strikingly  represents  one  phase  of  effort  which 
was  expended  to  make  iron  and  steel  manufacturing  possible  in 
this  section  of  the  Calumet  District. 

Mark  City  is  another  example  of  the  active  part  taken  by  a 
steel  company  in  developing  housing  facilities  for  its  employees, 
but  compared  with  that  in  the  case  of  Gary  the  effort  was  very 
small. 

A  distinctive  feature,  so  far  as  the  residential  districts  east  of 
Lake  Calumet  are  concerned,  is  the  preponderance  of  houses, 
rather  than  of  large  apartment  buildings.  This  indicates  the  less 
crowded  conditions  existing  there,  as  compared  with  those  in  South 
Chicago  or  in  Chicago  itself.  In  classifying  the  residences  into  four 
grades,  it  was  found  that  those  sections  which  house  the  foreigners 
of  relatively  recent  arrival  were  of  the  poorest  grade.  On  the  out- 
skirts of  such  centers  as  Hammond,  Gary  and  Blue  Island,  far 
removed  from  the  industrial  plants,  the  best  houses  are  located. 
The  poorest  types,  in  all  cases,  were  found  to  be  situated  close  to 
the  factories.  This  is  especially  noticeable  in  Hammond.  There 
is  a  definite  separation  of  different  nationalities,  since  colored 
and  foreign  sections  can  be  clearly  distinguished.  There  is  one 
exception  to  this,  however;  it  is  not  possible  to  distinguish  between 
types  who  occupy  the  intermediate  grades  of  houses.  The  dis- 
tinction is  only  possible  among  the  poorer  elements;  Americaniza- 
tion and  prosperity  tend  to  break  up  the  grouping  by  nationali- 

^.i  Survey  of  Gary,  Industrial  Committee,  Gary  Chamber  of  Commerce, 
P-3- 


277]  LABOR   CONDITIONS  97 

ties.  The  colored  people,  however,  are  definitely  segregated. 
Throughout  the  western  parts  of  the  district  the  prevalence  of 
apartment  buildings  gives  them  a  distinct  similarity  to  most  parts 
of  Chicago. 

At  the  present  time,  the  trend  of  urban  expansion  is  being 
guided  by  large  development  companies,  who  are  thinking  in 
terms  of  cities  rather  than  of  individual  blocks  or  lots.  They  have 
turned  their  attention  to  those  areas  which  are  located  along  the 
southern  margin  of  the  Calumet  District,  where  conditions  are 
especially  favorable  for  residential  development.  There  seems  to 
be  a  general  policy  of  leaving  the  present  unoccupied  areas  to  the 
north  of  the  Grand  Calumet  River  for  future  industrial  use,  and  to 
encourage  residential  development  farther  and  farther  away  from 
the  lake.  The  general  unpleasantness  of  living  under  crowded 
conditions  around  the  big  industries  is  recognized.  In  Gary,  many 
employees  in  the  steel  mills  have  established  their  homes  five  miles 
south  of  the  lake.  At  Hammond,  all  the  finer  residential  sections 
are  located  on  the  extreme  southern  fringe  of  the  town,  the  reason 
being  that  much  more  pleasant  surroundings  are  to  be  found  on  the 
slightly  elevated,  well  drained  lands  of  the  moraine  country, 
with  their  fertile  loamy  soils,  than  on  the  low,  poorly  drained  lands 
of  the  lake  plain,  with  their  hopelessly  sandy  soil.  This  southern 
development  has  been  possible  because  of  the  development  of 
street  car  and  motor  bus  services  which  provide  rapid  and  cheap 
transportation  to  most  of  the  industrial  plants.  Each  community 
has  more  or  less  adequate  street  car  services  which,  in.  most  cases, 
are  linked  with  those  of  the  neighboring  systems.  Most  of  the 
western  sections  can  be  reached  by  this  means  from  Chicago.  The 
large  number  of  private  automobiles  has  increased  the  distance  at 
which  people  can  live  and  yet  be  conveniently  located  to  their 
work. 

The  bulk  of  this  residential  expansion  southward  is  taking 
place  betwen  Gary  and  West  Hammond.  Farther  west,  there 
seems  to  be  none.  The  agricultural  land  between  Hammond  and 
Blue  Island  appears  to  be  typically  rural,  without  any  obvious 
urbanization  schemes  afoot.  Urban  expansion  is  taking  place  in 
the  areas  north  and  west  of  Kensington  and  Pullman. 

It  should  be  noted  that  building  operations  of  considerable 
magnitude  are  in  progress  within  the  various  cities  of  the  eastern 
section  of  the  district.   These  represent  the  gradual  completion  of 


98  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [278 

projects  which  were  initiated  in  the  past.  They  represent  a  re- 
sponse to  the  continued  demand  for  houses  on  the  part  of  those 
people  who  cannot  leave  the  vicinity  of  their  work,  or  whose  in- 
terests demand  their  residence  in  or  near  the  center  of  the  com- 
munity. 

The  existing  urban  development  is  clearly  a  result  of  the  in- 
dustrial demands,  for  its  growth  has  been  stimulated,  and  in  some 
cases  directed,  by  the  needs  and  progress  of  the  large  scale  in- 
dustries within  the  district.  Urban  conditions,  on  the  other  hand, 
have  done  much  to  stabilize  labor,  and  to  create  favorable  con- 
ditions for  the  growth  of  a  local  supply. 

The  Suburban  Railroad  Facilities 

The  development  of  suburban  railroad  services  has  kept  pace 
with  the  expansion  of  settlement.  The  Illinois  Central  and  Rock 
Island  railroads  tap  the  main  residential  and  industrial  points  in  the 
western  and  southwestern  parts  of  the  district,  and  provide  inter- 
urban,  as  well  as  Chicago  connections  which  are  adequate  for  the 
needs  of  the  community. 

In  the  same  way,  the  trunk  lines  which  cross  the  eastern  sector 
of  the  Calumet  District  provide  for  a  large  daily  movement  in 
and  out  of  the  industrial  sections.*  Trains  are  scheduled  at  the  times 
which  suit  the  steel  mill  workers,  so  that  many  of  these  are  able  to 
live  at  comparatively  long  distances  from  their  work.  Indeed, 
many  who  live  well  within  the  Chicago  city  limits  work  as  far  out 
as  Indiana  Harbor. 

These  suburban  services  make  the  whole  district  readily  acces- 
sible from  Chicago.  Additional  rapid  transportation  is  provided 
bv  the  Chicago  Lake  Shore  and  South  Bend  Electric  Railroad. 


*The  following  railroads  cross  the  district  in  the  immediate  neighborhood 
of  the  steel  mills:  New  York  Central,  Wabash,  Pennsylvania,  Baltimore  and 
Ohio. 


PART  II 
MARKETING  ASPECTS 


CHAPTER  V 

THE  CALUMET  DISTRICT  IN  RELATION 
TO  ITS  MARKETS 

The  Calumet  District  occupies  a  strategic  position  between 
two  great  complementary  regions,  the  industrialized  East  and  the 
agricultural  West,  which  should  make  it  an  ideal  center  for  the 
production  and  the  distribution  of  a  wide  range  of  iron  and  steel 
goods.  Its  relatively  central  location,  with  regard  to  the  North 
American  plain,  which  is  one  of  the  most  productive  agricultural 
areas  in  the  world,  and  an  enormous  market  for  iron  and  steel, 
gives  it  an  advantage  over  other  industrialized  areas  lying  farther 
east.  The  twenty-seven  converging  trunk  railroads,  together 
with  the  Great  Lakes  waterway,  offer  abundant  facilities  for  the 
distribution  of  manufactured  goods  over  a  very  wide  area.  The 
Calumet  District  has  advantages  for  production  which  should 
enable  it  to  develop  an  even  larger  industry,  since,  under  existing 
conditions,  iron  and  steel  can  be  made  more  cheaply  there  than 
anywhere  else  in  the  United  States. 

The  Natural  Markets  of  the  Calumet  District 

The  Market  hi  Chicago.  The  Calumet  District  has  all  the  ad- 
vantages of  proximity  to  Chicago,  the  greatest  commercial  and 
industrial  center  in  the  interior  (Fig.  3).  Consequently,  there  is 
a  very  large  market  near  at  hand  for  the  products  of  the  local 
steel  mills.  Chicago  and  its  vicinity  have  many  large  scale  in- 
dustries, and  a  large  population.  Moreover,  the  whole  area  is 
developing  very  rapidly.  Consequently,  its  needs  are  expanding 
at  the  same  rate.  Table  VII  indicates  the  major  activities  carried 
on  within  the  city  limits.  It  does  not  include  those  industries 
which  are  located  at  Whiting,  Hammond,  East  Chicago,  Indiana 
Harbor,  and  Gary  because  no  separate  statistics  are  available 
for  these  cities.  Consequently,  it  indicates  only  part  of  the  manu- 
facturing carried  on  in  metropolitan  Chicago.  Almost  all  the 
industries  create  some  demand  for  iron  and  steel,  directly  or 
indirectly,  and  the  natural  source  of  these  materials  is  the  local 
mills. 

The  Character  0/  the  Market  in  Chicago  and  the  Nature  of  Its 
Demands. — The  fabrication  of  iron  and  steel  goods  is  one  of  the 

lOI 


102  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [282 


TABLE  VII* 
Manufactures  of  Chicago 


Agricultural  Manufactures 

Slaughtering  and  meat  packing 

Leather  tanning,  etc 

Food  products 

Malt  liquors 

Soap  products 

Flour  and  grist  mill  products 

Lumber  Manufactures 

Mill  productsf 

Furniture 

Pianosf 

Iron  and  Steel  Manufactures 

Foundry  and  machine  shop  products 

Railroad  cars 

Agricultural  implementsf 

Electrical  machinery 

Automobiles  (including  parts) 

Clothing 

Men's 

Women's 

Miscellaneous 

Printing  and  publishing 

Bread  and  bakery  products 

Confectionery 


Value 

of 

Products 


Value 
Added  by 
Manu- 
facture 


Millions  of 
dollars 


125 
16 

9 
15 

6 

3 


47 


Wage 
Earners 


Thousands 


45 
4 
3 
2 
2 
O. 


139 
119 

84 

52 

29 
27 

78 
69 

41 

20 

16 
6 

190 

64 

103 

25 

37 
9 

157 
78 

S2 

24 

21 
10 

2 

♦Compiled  from  the  U.  S.  Census  of  Manufactures,  1919. 
tNo  statistics   available. 


major  activities  throughout  metropolitan  Chicago.  This  creates 
a  large  demand  for  iron  and  steel  in  all  its  forms,  which  can  be 
supplied  by  local  mills. 

A  large  number  of  industries  relating  to  railroading  have  been 
established  in  and  around  the  city,  on  account  of  its  position  at 
the  center  of  the  densest  railroad  net  in  the  country,  and  the 
availability  of  raw  material.  Apart  from  the  terminal  shops  for 
the  repair  and  maintenance  of  locomotives  and  rolling  stock,  which 
are  to  be  found  in  connection  with  all  the  railroads  which  enter 
Chicago,  there  are  a  large  number  of  factories  engaged  in  the 
production  of  new  material.    Locomotives,  cars  of  all  kinds,  and 


xiuai  Liic  iron  ana 


steel  mills,  while  the  small 


I^STROPOLtTf^N     Cm/GAG-O 


Elgin  J'oLieT  fiNiiEfiSTefiH 


Built    vp   ^«£"S 


Figure  3 


283]       THE  CALUMET  DISTRICT  IX  RELATION  TO  ITS   MARKETS  IO3 

equipment  of  all  sorts,  are  produced  In  large  quantities  for  dis- 
tribution throughout  the  country,  but  particularly  in  the  West, 
Northwest,  and  Southwest.  The  large  demand  for  rails,  plates, 
bolts,  spikes,  etc.,  for  distribution  along  the  various  routes  also 
can  be  supplied  conveniently  from  the  Calumet  District. 

Railroads  always  have  played  an  important  part  in  the  de- 
velopment of  the  iron  and  steel  industry  in  the  Chicago  District. 
The  demand  for  iron  rails  In  the  middle  of  the  nineteenth  century 
led  to  the  establishment  of  the  early  rolling  mills,  and  of  the  car 
and  locomotive  shops.  The  first  plant  In  the  Calumet  District 
was  built  to  supply  steel  rails.  Railroads  have  never  ceased  to  be 
the  largest  consumers  of  steel.  In  1924,  they  utilized  28%  of  all 
the  steel  produced  in  the  country  (Table  IX). 

The  natural  place  for  the  factories  manufacturing  this  type  of 
material  Is  near  the  source  of  iron  and  steel,  provided  this  source 
Is  advantageously  located  with  reference  to  the  dominant  market 
and  transportation  facilities.  Hence  there  are  a  large  number  of 
such  factories  in  the  Calumet  District  near  all  the  steel  mills,  or  In 
close  connection  with  them  through  the  medium  of  the  belt  rail- 
roads. Some  of  these  factories  have  a  very  large  production. 
The  Standard  Steel  Car  Company  consumes  300,000  tons  of  plates 
annually,  as  well  as  many  tons  of  bolts  and  shapes.  The  Pullman 
Company  manufactures  the  bulk  of  its  cars  within  Chicago,  and 
most  of  the  steel  which  it  requires  is  available  at  the  Calumet 
mills.  The  Griffin  Wheel  Company  of  West  Pullman  produces 
1000  wheels  per  day,  and  Is  one  of  the  more  important  industries 
of  its  kind  In  the  country. 

It  was  estimated  that  the  construction  of  railroad  equipment 
and  locomotives  consumed  7,452,000  tons  of  steel  in  1924  for  the 
United  States  as  a  whole  (Table  VIII).  It  is  impossible  to 
say,  in  the  absence  of  definite  statistics,  just  what  proportion  of 
this  was  manufactured  in  the  Chicago  District,  but  the  presence 
of  so  large  a  number  of  railroad  and  car  shops  would  Indicate  that 
the  amount  was  very  considerable.  The  figures  in  Table  VII  only 
represented  part  of  the  consumption,  as  has  been  noted,  since  all 
the  Calumet  District  is  not  included. 

Foundries  and  machine  shops  of  all  kinds  consume  a  very 
large  amount  of  iron  and  steel  owing  to  the  extensive  manufacture 
of  these  products  throughout  metropolitan  Chicago.  The  more 
bulky  forms  are  made  near  the  iron  and  steel  mills,  while  the  small 


I04  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [284 


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285]        THE  CALUMET  DISTRICT  IN   RELATION   TO   ITS   ZMARKETS  IO5 

specialties  are  made  in  all  the  industrial  sections.  The  total  value 
of  steel  used  for  these  purposes  amounted  to  ?5,ooo,ooo  in  1919. 

Chicago  is  famous  the  world  over  for  its  agricultural  imple- 
ments and  machinery.  The  International  Harvester  Company 
utilizes  most  of  the  product  of  its  subsidiary,  the  Wisconsin  Steel 
Company,  which  amounts  to  250,000  tons  of  steel  per  annum. 

Chicago  has  adopted  the  lofty  type  of  steel  building,  and  the 
construction  of  these  results  in  a  large  demand  for  structural  steel, 
most  of  which  is  fabricated  in  the  immediate  vicinity  of  the  rnills. 
A  feature  of  the  weekly  journals  interested  in  iron  and  steel,  is  the 
enumeration  of  building  permits  and  their  steel  requirements. 
These  structures  may  be  department  stores,  hotels,  office  buildings, 
new  manufacturing  plants,  banks,  warehouses,  etc.,  called  into 
existence  by  the  rapidly  growing  commercial  and  industrial  ac- 
tivities of  the  city.  "Building  construction  in  Chicago  made  an 
excellent  showing  in  192 1.  .  .  .  Permits  were  taken  out  for 
7800  structures,  extending  over  a  frontage  of  233,025  feet  and 
involving  a  total  cost  of  $124,028,010,  as  compared  with  3745 
buildings  on  135,550  feet  of  frontage  and  a  cost  of  $79,102,650, 
in  1920."^ 

The  extensive  oil  refineries  at  Whiting,  with  their  storage 
tanks  and  specialized  rolling  stock,  constitute  another  important 
local  market  for  steel  products.  The  American  Tank  Car  Company, 
at  East  Chicago,  is  one  of  the  more  important  producers  of  tank 
cars  in  the  United  States. 

The  extensive  electrical  and  automotive  industries  offer 
another  important  local  market.  These  industries  consumed  raw 
materials  to  the  value  of  $80,000,000  in  191 9,  much  of  which  was 
iron  and  steel.  These  industries  particularly  affect  departments 
producing  sheets,  cold  rolled  steel,  bars,  and  wire  products. 

A  glance  at  the  list  of  manufacturing  activities  in  Chicago 
shows  the  extensive  markets  for  machinery  and  many  varieties 
of  specialties,  all  of  which  utilize  iron  and  steel  directly  or  in- 
directly. 

It  is  impossible  to  discover  just  what  proportion  of  the  total 
Chicago  consumption  is  supplied  locally.  Nor  is  it  possible  to 
even  estimate  the  total  consumption,  since  no  statistics  are 
available  for  a  number  of  important  industries,  owing  to  the  danger 
of  disclosing  individual  operations. 

^Iron  Age^  January  12,  1923,  p.  167. 


106  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [286 

The  Markets  Beyond  Chicago. — The  location  of  the  Calumet 
District,  in  the  heart  of  the  continent,  with  adequate  communi- 
cations radiating  in  all  directions,  favors  a  wide  distribution  of 
products.  The  evidence  laid  before  the  Federal  Trade  Commission 
made  it  clear  that  the  production  is  greater  than  the  demands  of 
Chicago  and  its  immediate  vicinity,  and,  therefore,  there  is  a 
surplus  for  wider  distribution.  This  market  should  include  all 
those  sections  of  the  United  States  which  naturally  look  to  this 
center  as  a  source  of  supply.  These  should  include  all  states  to 
which  iron  and  steel  can  be  supplied  more  cheaply  than  from  other 
producing  centers.  Under  normal  trading  conditions  there  should 
be  no  difficulty  in  serving  this  extended  market,  since  almost  every 
form  of  iron  and  steel  needed  is  produced  in  the  Calumet  District. 
In  limiting  the  market,  costs  of  transportation  exert  an  important 
influence.^ 

The  Pacific  coast  region,  as  a  rule,  does  not  form  a  part  of  the 
Calumet  market,  because  the  eastern  Pennsylvanian  mills  are 
located  strategically  nearer  the  Atlantic  seaboard,  and  under 
normal  conditions,  ocean  transportation,  by  way  of  the  Panama 
Canal  is  cheaper  than  the  all-rail  haul  from  the  Calumet  District. 
Between  1914  and  1920,  however,  slides  in  the  Panama  Canal, 
and  the  almost  complete  withdrawal  of  coastwise  shipping  during 
the  war  period,  disrupted  the  usual  channels  of  this  trade.  Ocean 
rates  were  increased  greatly,  and  it  became  necessary  to  utilize 
the  railroad  facilities. 

The  Calumet  District,  being  located  farther  west  than  the 
other  big  producing  areas,  was  able  to  obtain  a  large  share  of  the 
Pacific  Coast  trade,  since  it  was  cheaper  to  ship  iron  and  steel 
from  that  district  than  from  Pennsylvania.    The  Illinois  Steel 

-Freight  rates  on  finished  steel  products  from  Pittsburgh  and  Chicago  con- 
suming points  per  100  pounds,  are  as  follows: 

From  From  From  From 

To  Pittsburgh      Chicago  To  Pittsburgh      Chicago 


Atlanta $0.58           $0 

Beaumont,  Texas.  ..  .  0.705 

Birmingham 0.58 

Casper,  Wyoming. .. .  1.15 

Chattanooga 0.50 

Chicago. 0.34 

Cincinnati o.  29 

Columbus,  Ohio o.  2!;5 

Dallas,  Texas 0.885 

Denver i  •  15 

Detroit o.  29 

Houston,  Texas 0.89 

Indianapolis 0.31 


67                Kansas  City $0,735  $0-3S 

49                 Memphis 0.56  0.42 

53                 New  Orleans 0.67  0.57 

835              Omaha 0.735  0.35 

49                Pacific  Coast 1.15  i.oo 

St.  Louis 0.43  0.3s 

28  St.  Paul 0.60  0.275 

29  Shreveport,  Louisiana  0.79  0.63 
69  Smackover,  Arkansas  0.62  0.60 

82                 Toledo,  Ohio 0.27  0.265 

275  Tulsa,  Oklahoma.  ..  .  0.885  0.645 

49                Wichita 0.89  0.585 

25 


Hammond  Chamber  of  Commerce,  February,  1925. 


287]        THE   CALUMET  DISTRICT  IN   RELATION   TO   ITS    MARKETS  10/ 

Company  alone  shipped  178,000  tons  in  191 8  to  consumers  in  that 
distant  market.  Before  the  end  of  1920  coastal  shipping  became 
normal,  and  ocean  freight  rates  dropped,  so  that  the  Calumet 
mills  lost  the  Pacific  Coast  trade  to  eastern  producers.  In  1922, 
the  Illinois  Steel  Company  shipped  only  1,400  tons  there,  and  since 
then  it  has  ceased  to  serve  that  area.^ 

Some  areas  in  the  South  and  Southwest  can  be  supplied  more 
cheaply  from  the  Birmingham  district,  or  by  means  of  coastwise 
shipping  from  eastern  Pennsylvania.  Extensive  territory  can  be 
served  more  conveniently,  from  a  number  of  less  important  iron 
and  steel  centers,  such  as  Duluth  and  St.  Louis.  Production  at 
Provo,  Utah,  probably  will  determine,  more  and  more,  the  western 
boundary  of  the  Calumet  market. 

The  lower  costs  of  production  in  the  Calumet  District  have 
tended  to  give  the  producers  there  a  tremendous  advantage  over 
other  areas,  and  should  help  to  offset  the  costs  of  reaching  the 
more  distant  markets. 

Had  it  not  been  for  the  arbitrary  control  of  price  levels  at 
Chicago  and  at  Pittsburgh,  the  eastern  limits  of  the  Calumet 
markets  would  be  marked  by  a  north-south  line  drawn  approxi- 
mately midway  between  Chicago  and  Pittsburgh.  Such  a  line 
would  pass  through  Detroit  and  Toledo,  and  would  run  well  to 
the  east  of  Columbus  and  Cincinnati.  If  prices  were  lower  at 
Chicago,  then  this  boundary  line  would  be  pushed  farther  east- 
ward, until  the  additional  costs  of  transportation  counterbalanced 
the  difference  in  prices. 

Throughout  the  territory  west  of  this  line,  the  Calumet  pro- 
ducers would  have  had  to  fear  no  competition,  provided  their 
selling  prices  had  been  no  higher  than  those  in  Pittsburgh,  because 
the  cost  of  transportation  would  have  proved  an  effective  barrier 
to  eastern  products.  Only  in  the  case  of  shortage,  or  where  certain 
types  of  products  not  made  in  the  Calumet  mills  were  required, 
would  there  have  been  any  movement  into  the  western  markets 
from  eastern  centers.  The  best  example  of  the  latter  type  of  case 
is  the  distribution  of  special  shapes  which  are  made  by  the  Bethle- 
hem Steel  Corporation.  These  are  marketed  all  over  the  country. 
In  1922,  17  per  cent  of  the  total  production  of  these  shapes  was 
sold  west  of  Chicago.^  For  similar  reasons,  many  of  the  blue 
annealed  sheets  from  Gary  have  been  sold  in  the  East. 

^Iron  Age,  July  12,  1923,  p.  83. 
*Iron  Age,  May  24,  1923,  p.  1481. 


I08  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT        [288 

The  Character  of  the  Market. — The  Calumet  District  serves  a 
market  which  demands  the  entire  range  of  iron  and  steel  products. 
The  dominant  economic  activities  of  this  market  are  associated 
with  agriculture,  mining,  cattle  raising,  and  many  phases  of 
manufacture  and  transportation.  All  of  these  activities  exert  a 
powerful  influence  on  the  production  of  iron  and  steel. 

The  demand  for  agricultural  machinery  and  equipment  comes 
mainly  from  the  Middle  West,  Northwest,  and  South.  Much  of 
this  machinery  is  supplied  by  fabricating  companies  in  the  vicinity 
of  Chicago,  which  are  conveniently  located  with  reference  to  the 
steel  mills.  Many  small  fabricating  shops,  however,  are  scattered 
throughout  the  region.  These  should  draw  their  supplies  from  the 
Cakimet  mills,  which  are  the  most  conveniently  located  and  can 
supply  all  their  needs.  In  addition,  large  quantities  of  wire 
products  are  required  for  fencing  and  other  purposes  in  the  farming 
and  grazing  areas  where  lumber  is  scarce,  and  therefore,  expensive. 
It  was  estimated  that  in  1923  farmers  and  ranchers  utilized  from 
60  per  cent  to  75  per  cent  of  the  total  output  of  these  products, 
and  the  Middle  West  and  Great  Plains  region  constituted  the  more 
important  markets.  Galvanized  sheets  also  form  another  large 
item  of  western  consumption,  as  a  substitute  for  lumber  and  other 
building  material.^ 

The  growth  of  population  and  urban  centers,  with  the  resulting 
industrial  and  economic  development  throughout  the  great  area 
tributary  to  Chicago,  has  increased  the  demand  for  structural 
steel.  This  is  fast  replacing  lumber  in  modern  specialized  buildings 
and  factories,  partly  owing  to  the  decreased  fire  hazard  which  its 
use  entails,  and  partly  to  the  increased  price  of  lumber  resulting 
from  the  exhaustion  of  the  more  accessible  supplies.  Reinforced 
concrete  is  being  used  in  rapidly  increasing  amounts,  and  this  re- 
quires large  quantities  of  iron  and  steel  bars  of  many  sorts  and 
sizes.  The  Calumet  mills  are  situated  conveniently  to  supply 
much  of  this  need,  particularly  in  the  West,  and  the  production  of 
these  commodities  is  one  of  their  chief  interests. 

The  enormous  growth  of  the  automotive  industry  has  been 
responsible  for  a  large  increase  in  the  production  of  plates,  bars, 
and  sheets.  Steel  of  particular  grades  plays  an  important  part  in 
the  construction  of  automobiles,  tractors,  and  trucks,  and  in  mak- 
ing numerous  parts  for  them  in  specialized  plants.    The  great 

^Iron  Age,  January  3,  1924. 


289]        THE   CALUMET  DISTRICT   IN   RELATION    TO   ITS    MARKETS  IO9 

extent  of  the  country,  the  general  prosperity,  which  has  prevailed 
in  recent  years,  of  the  farming  and  industrial  communities,  the 
increasing  use  of  automotive  equipment  in  agriculture,  in  industry, 
and  in  other  lines,  together  with  the  widespread  need  for  rapid 
transportation  to  supplement  that  afforded  by  the  railroads,  all 
have  contributed  powerfully  to  the  rapid  development  of  this 
industry.  The  chief  manufacturing  centers  of  these  products  are 
located  advantageously  with  reference  to  the  Calumet  District, 
which  supplies  much  of  their  raw  material. 

The  gas,  water,  heating,  and  sanitation  systems,  of  most  of 
the  urban  centers,  are  dependent  upon  adequate  supplies  of  pipes. 
In  addition,  the  exploitation  of  mineral  resources  is  dependent  upon 
this  type  of  product.  The  Calumet  producers  are  favorably  located 
to  supply  much  of  the  iron  and  steel,  mainly  pipes  and  sheets, 
needed  in  the  development  of  the  mid-continental  oil  fields.  This 
group  of  consumers  has  been  responsible  for  the  growth  of  a  highly 
specialized  branch  of  steel  manufacture  in  the  Calumet  District. 

The  expansion  of  manufacturing  in  the  Northern  Interior, 
particularly  in  the  north  central  states  westward  of  Ohio,  has 
stimulated  the  production  of  many  kinds  of  machinery.  This  has 
provided  an  important  outlet  for  the  products  of  the  Calumet 
mills  over  a  very  extensive  area. 

The  provision  of  arterial  highways  constitutes  another  use 
for  steel  products.  Wire  mesh  is  used  extensively  for  reinforcing 
the  concrete  surface  of  roads.  The  building  of  bridges  requires  a 
large  tonnage  of  structural  steel,  which  can  be  supplied  to  many 
areas  more  conveniently  from  the  Calumet  mills  than  from  those 
located  in  the  East. 

The  extensive  canning  industry  of  the  Northern  Interior  pro- 
vides another  important  use  for  steel.  The  large  quantities  of  fruit, 
milk,  vegetables,  corn,  and  meat,  which  are  canned  each  year, 
create  a  large  demand  for  tin  plate,  which  is  produced  extensively 
at  Gary. 

The  foreign  market  has  played  a  larger  part  in  the  distribution 
of  the  products  of  the  Calumet  District  than  might  have  been 
expected  from  its  inland  location.  The  importance  of  this  was  due 
to  artificial  arrangements  which  functioned  as  a  result  of  the 
"Pittsburgh  Plus"  system,  arrangements  which  offset  the  dis- 
advantages of  a  location  remote  from  the  seaboard.^ 

•Federal  Trade  Commission,  Docket  740. 


no  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [29O 

Tables  VIII  and  IX  show  the  consumption  of  steel  for  the 
United  States  as  a  whole.    No  figures  are  available  to  show  what 

TABLE  IX* 

Distribution  of  Steel  Among  the  Chief  Consuming  Groups 
IN  THE  United  States 


Group 


1924 

% 

1923 
% 

1922 
% 

28.0 

27.0 

22.0 

18.0 

15-5 

15.0 

9.0 

II. 0 

lO.O 

9.0 

10.5 

10. 0 

6.0 

6.0 

7.0 

3-0 

3-0 

4.0 

4.0 

4.0 

4.0 

3-5 
.8 

3-5 
.8 

2.8 

■9 

18.7 

19.5 

28.0 

I92I 

% 


Railroads  (incl.  cars  and  locos.) 

Building  and  Construction  (not  R.  R.). 

Automotive 

Oil,  Gas,  Mining,  Water 

Exports 

Agriculture 

Food  Containers 

Machinery 

Shipbuilding 

Miscellaneous 


17. 1 
14.2 
9.8 
7-7 
13-4 
3-6 
31 
4-5 
2.6 

23-7 


*Iron  Age,  January  1922,  1923,  1924,  1925. 

amounts  of  each  type  of  product  originated  in  the  Calumet  Dis- 
trict. The  figures  show  clearly  the  relative  importance  of  each 
major  use  and  the  type  of  product. 


Transportation  Facilities  of  the  Calumet  District 
IN  Relation  to  Marketing 

As  already  noted,  the  Calumet  District  has  excellent  trans- 
portation facilities  for  distributing  its  products  very  widely. 
Most  of  the  iron  and  steel  moves  out  by  rail  because  the  chief 
consuming  areas  lie  to  the  west,  south,  and  east.  Little  has  been 
done  to  utilize  the  Great  Lakes  waterway  as  a  medium  for  dis- 
tribution. 

Railroads. — Owing  to  the  nature  of  the  commodities  handled, 
and  the  location  of  the  markets,  railroad  facilities  are  most  vital 
to  the  iron  and  steel  industry.  Proximity  to  Chicago  gives  the 
Calumet  District  the  advantage  of  utilizing  all  the  trunk  lines 
which  have  terminals  there.  These  lines  radiate  in  almost  all  direc- 
tions, and  give  rapid  and  direct  communication  with  every  section 
of  the  United  States  (Fig.  3). 


291]        THE   CALUMET  DISTRICT   IX   RELATION    TO   ITS    MARKETS  III 

All  those  from  the  East  are  forced  to  pass  round  the  southern 
extremity  of  Lake  Michigan  in  order  to  reach  Chicago.  The  Calu- 
met District  lies  athwart  their  paths.  A  number  of  these  lines 
follow  the  lake  shore,  and  their  presence  was  one  of  the  reasons 
for  the  location  of  the  steel  mills.  These  lines  offer  the  most  direct 
communication  with  the  East. 

The  belt  railroads  provide  connections  with  all  the  twenty- 
seven  railroads  which  radiate  from  Chicago,  and  also  handle 
purely  local  distribution.''  These  serve  the  individual  plants, 
whether  the  latter  are  located  on  the  trunk  lines  or  not,  and  they 
penetrate  Into  all  parts  of  the  district.  They  form  three  concen- 
tric, but  irregular  rings  around  and  through  metropolitan  Chicago, 
and  intersect  all  the  trunk  lines  which  leave  the  city.  At  these 
points,  they  offer  direct  connection  with  all  of  these  trunk  lines, 
which  maintain  clearing  yards  nearby.  Any  steel  plant  located  on 
any  railroad  in  the  district  can  ship  its  products  with  a  minimum 
amount  of  delay  and  switching.  This  is  almost  equivalent  to  being 
located  on  all  the  railroads  which  enter  and  leave  Chicago.  Ship- 
ments to  or  from  the  Calumet  District  can  be  received  or  dis- 
patched through  the  medium  of  the  belt  railroads  and  clearing 
yards  without  entering  Chicago,  with  the  result  that  they  avoid 
the  congested  traffic  of  the  city,  and  thus  reach  their  destinations 
in  less  time.  Gary  has  the  advantage  of  from  twenty-four  to  thirty- 
six  hours  over  Chicago  for  all  shipments  to  and  from  the  East.^ 
It  should  be  borne  in  mind  that  the  belt  lines  represent  a  great 
number  of  combinations  and  amalgamations  of  many  smaller 
lines  which  were  not  planned  originally  as  part  of  a  comprehensive 
whole.  As  the  industrialization  of  the  Calumet  District  progressed, 
these  small  lines  were  built  to  serve  specific  interests,  and  to 
link  them  with  particular  trunk  lines.  These  small  lines  have 
been  merged  gradually  into  three  main  systems  which  function 
entirely  as  freight  carriers,  having  no  interest  whatever  in  passenger 
services.^ 

'(a)   Elgin  Joliet  and  Eastern  R.  R.  (Outer  Belt). 

(b)  Indiana  Harbor  Belt  R.  R. 

(c)  Baltimore  &  Ohio  Chicago  Terminal  R.  R. 
*Gary  Chamber  of  Commerce. 

^From  information  supplied  by  an  official  of  the  Indiana  Harbor  Belt 
Railroad. 


112  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [292 

The  Elgin  Joliet  and  Eastern  Railroad  (the  Outer  Belt)  is 
controlled  by  the  United  States  Steel  Corporation,  which  owns  the 
majority  of  the  stock.  The  main  purpose  of  this  system  is  to  link 
up  all  the  mills  in  the  Calumet  District  which  are  owned  by  this 
corporation,  with  similarly  owned  plants  at  Joliet  and  Milwaukee. 
Rapid  intercommunication  between  these  plants  is  thus  effected. 
Although  this  railroad  acts  as  a  common  carrier  and  comes  within 
the  jurisdiction  of  the  Interstate  Commerce  Commission  in  regard 
to  freight  charges,  it  is  not  difficult  to  understand  that  the  cor- 
poration traffic  has  preference.  The  profits  which  result  from  its 
operations  form  a  part  of  the  income  of  the  United  States  Steel 
Corporation.  The  various  subsidiary  companies  of  the  latter  which 
use  it  are  charged  the  same  rates  as  the  general  public.  This  rail- 
road does  not  encourage  Chicago  switching  traffic.  It  is  concerned 
primarily  with  corporation  and  through  movements.^" 

The  Outer  Belt  line  begins  at  the  Illinois  Steel  Company's 
plant  at  South  Chicago,  and  follows  the  shore  to  Whiting,  Indiana 
Harbor,  Buffington,  and  Gary,  tapping,  on  the  way,  all  the  steel 
mills  and  the  more  industrialized  sections  of  the  Calumet  Dis- 
trict. Branch  lines  serve  the  Calumet  River  sections,  as  well  as 
the  oil  refineries  at  Whiting,  and  make  connection  with  the  Outer 
Belt  line  just  south  of  Gary,  by  way  of  Hammond  and  Shearson. 
Classification  takes  place  at  Kirk  Yard.  From  Gary  this  belt  line 
runs  in  a  great  arc  well  outside  the  Calumet  and  Chicago  districts, 
avoiding  the  congested  areas  near  the  city.  Rapid  through  trans- 
portation is  facilitated  because  the  points  at  which  it  crosses  the 
main  trunk  lines  converging  on  Chicago  are  farther  apart  than 
those  nearer  the  city.  This  enables  the  trains  to  attain  a  greater 
speed  in  the  intervening  sections.  The  greater  speed  in  turn 
offsets  the  greater  distance  covered.  The  United  States  Steel  Cor- 
poration mills  in  Joliet  obtain  their  ore  and  limestone  from  South 
Chicago  over  this  route.  The  corporation  is  able,  therefore,  to 
transport  these  materials  on  its  own  railroad,  and  thereby  keep  the 
business  entirely  in  its  own  hands,  with  considerable  saving  in 
costs.  In  the  same  way,  crude  iron  and  steel  can  be  carried  to  the 
northern  plant  of  the  corporation  at  Milwaukee  with  much  greater 
dispatch  than  by  any  other  route.  Figure  3  indicates  clearly  the 
territory  covered  by  this  line,  and  its  position  relative   to  the 

^"From  information  supplied  by  officials  of  the  company. 


293]        THE   CALUMET  DISTRICT  IX   RELATION   TO   ITS    MARKETS  I  I3 

Indiana  Harbor  Belt  Railroad  is  indicated  in  order  to  emphasize 
the  wide  sweep  which  it  makes  in  order  to  avoid  Chicago. 

The  Indiana  Harbor  Belt  Railroad  is  less  easy  to  trace,  either 
on  a  map,  or  on  the  ground,  since  it  is  located  nearer  to  the  city 
than  the  Outer  Belt,  and  therefore  functions  under  more  con- 
gested conditions.  Like  its  rival,  the  Outer  Belt,  it  makes  a  circuit 
around  Chicago,  but  east  of  Blue  Island  it  penetrates  the  in- 
dustrialized sections  of  the  Calumet  District.  Another  complicat- 
ing factor  in  connection  with  this  railroad  is  that  the  company 
has  running  rights  over  the  tracks  of  other  companies,  with  the 
result  that  it  is  difficult  to  follow  all  of  its  ramifications.  From 
Blue  Island  the  line  runs  to  West  Hammond,  where  it  sends  a 
branch  down  the  east  side  of  the  Calumet  River  to  join  the  main 
tracks  of  the  New  York  Central  Railroad.  It  also  has  running 
rights  down  the  western  side  of  the  river  over  the  Calumet  Western 
tracks,  which  also  have  connection  with  the  New  York  Central. 
It  is  thus  able  to  serve  all  the  iron  and  steel  plants  along  the  river. 
East  of  Hammond  it  serves  the  industrialized  sections  both  north 
and  south  of  the  Grand  Calumet  River  as  far  east  as  Gibson,  where 
its  main  clearing  yard  is  situated.  Its  tracks  penetrate  every  part 
of  East  Chicago  and  Indiana  Harbor  where  it  serves  the  steel 
mills.  From  the  latter  point  the  company  has  running  powers  over 
the  New  York  Central  tracks  to  South  Chicago,  which  enable  it  to 
tap  the  oil  refining  sections  by  a  loop  which  swings  around  the 
Jones-Laughlin  site  and  back  to  Roby.  It  also  serves  the  Iroquois 
blast  furnaces  at  Sovith  Chicago.  It  has  running  rights  as  far  east 
as  Dune  Park,  well  beyond  Gary,  which  will  enable  it  to  serve  any 
future  industrial  development  in  that  part.  The  ramifications  of 
this  belt  line  within  Chicago  are  still  more  complicated,  but  they 
do  not  form  a  part  of  this  study.  It  performs  the  same  type  of 
work  as  does  the  Outer  Belt,  except  that  it  has  a  much  wider  range 
of  customers,  and  serves  the  whole  of  metropolitan  Chicago.  Cars 
from  the  Calumet  District  are  collected  at  the  Gibson  Yards,  and 
from  there  are  dispatched  to  the  various  trunk  lines  running  north, 
east,  south,  and  west  (Fig.  i). 

The  growth  of  this  particular  railroad  can  be  seen  from  the 
following  data.  In  October,  1912,  it  had  2084  employees  with  a 
monthly  payroll  of  3145,736.  In  1917,  there  were  2999  employees 
who  earned  $286,151  per  month.  In  October,  1922,  the  number 
of  employees  had  increased  to  3,664  with  a  monthly  payroll  of 


114  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [294 

$566,839.  This  represents  a  75  per  cent  increase  of  personnel  in 
ten  years,  and  a  payroll  approximately  doubled.'^  Since  1917, 
the  number  of  loads  has  increased  by  30  per  cent.  The  bulk 
(90  per  cent)  of  the  business  of  this  railroad  is  in  the  Calumet  Dis- 
trict. From  1912  to  1922,  the  number  of  cars  to  and  from  the  vari- 
ous industrial  plants  increased  from  68,075  to  159,312.^2 

The  Baltimore  and  Ohio  Chicago  Terminal  Railroad  (B.  & 
O.  C.  T.)  forms  the  innermost  of  the  three  belt  lines  which  serve 
the  Calumet  District.  This  line  performs  all  the  functions  of  a 
switching  agent,  but  it  does  so  at  some  disadvantage  compared  with 
either  of  the  others.  Its  chief  disadvantage  is  due  to  its  location 
nearest  to  the  congested  districts  of  the  city.  The  points  of  inter- 
section with  the  main  trunk  lines  are  much  less  widely  separated 
than  in  the  case  of  either  the  Outer  Belt  or  the  Indiana  Harbor 
Belt,  with  the  result  that  traffic  along  it  is  slowed  down  at  much 
more  frequent  intervals.  The  through  movement  of  goods  by  this 
road  is  therefore  slower,  particularly  within  the  city  limits.  This 
road  also  enters  the  Calumet  District  at  Blue  Island  and  from 
that  point  parallels  the  Indiana  Harbor  Belt  line  as  far  as  Ham- 
mond and  East  Chicago,  from  which  places  it  sends  branches  to 
the  oil  refineries  at  Whiting,  and  to  the  southern  sections  of  East 
Chicago.  The  latter  enable  it  to  handle  iron  and  steel  products 
from  the  various  fabricating  plants  of  this  section  of  the  Calumet 
District.  From  East  Chicago  it  runs  east  to  Clark  Junction,  where 
it  turns  west  and  forms  one  of  the  group  of  railroads  which  parallel 
the  lake  shore  to  Indiana  Harbor,  where  it  can  compete  with  the 
other  belt  roads  for  the  business  of  the  steel  mills.  At  this  point 
it  makes  connection  with  the  Baltimore  and  Ohio  trunk  lines,  which 
enables  it  to  tap  the  South  Chicago  industrial  district.  The  bulk 
of  its  business  in  the  Calumet  District  is  carried  on  with  the  oil 
companies  and  the  fabricators  of  iron  and  steel.  It  adds  an  addi- 
tional transportation  facility  for  the  major  interests  of  the  dis- 
trict, but  its  proportion  of  the  total  traffic  is  much  less  than  that 
of  either  of  its  two  rivals. 

Most  of  the  steel  mills  utilize  the  services  of  either  the  Outer 
Belt  or  the  Indiana  Harbor  Belt.  The  Illinois  Steel  Company  and 
the  Indiana  Steel   Company,  being  subsidiaries  of  the  United 

"Pfp  in  Calumet,  Hammond  Chamber  of  Commerce,  March,  1924,  p.  18. 


295]        THE   CALUMET  DISTRICT   IN    RELATION   TO   ITS    MARKETS  II5 

States  Steel  Corporation,  use  the  former  only.  The  Inland  Steel 
Company,  being  the  chief  rival  of  the  Illinois  Steel  Company, 
uses  only  the  latter.  The  other  steel  producers  use  both  in  varying 
proportions.  The  competition  between  the  three  lines  tends  to 
maintain  the  standard  of  efficiency  on  all. 

For  the  distribution  of  commodities  within  the  Calumet 
District  each  belt  railroad  company  performs  the  necessary 
switching  operations,  if  the  plant  to  which  a  particular  car  is 
consigned  is  located  on  its  own  road.  If  it  Is  on  another  road,  then 
the  car  is  taken  to  the  nearest  clearing  yard  on  that  line,  which 
delivers  it  to  Its  destination.  The  fact  that  the  shipper  can  stipu- 
late the  route  by  which  his  goods  are  to  reach  their  destination, 
enables  him  to  use  the  one  which  serves  him  best,  and  the  belt 
lines  offer  him  prompt  connection  with  any  one  he  may  choose. 

Switching  rates  are  from  $5  to  $14  per  car,  according  to  the 
nature  of  the  services  rendered,  throughout  the  "Chicago  Switch- 
ing District." 

Trucking. — Trucking  plays  only  a  minor  role  In  the  district, 
so  far  as  the  iron  and  steel  mills  are  concerned.  Their  products 
require,  for  the  most  part,  railroad  facilities.  Many  of  the  fabri- 
cating plants,  producing  lighter  forms  of  finished  goods,  do  utilize 
trucks  for  purely  local  traffic,  but  the  belt  railroads,  with  their 
elaborate  system  of  inter-communication,  can  carry  out  local 
distribution  much  more  effectively  since  they  cater  for  less  than 
carload  lots  as  well  as  for  the  more  bulky  loads.  This  applies 
equally  to  goods  destined  for  Chicago  or  for  points  more  remote. 

Lake  Transportation  of  Iron  and  Steel. — As  briefly  Indicated, 
very  little  iron  and  steel  Is  shipped  out  by  lake.  In  the 
main  the  markets  He  in  the  opposite  direction,  and  railroads  are 
better  suited  to  carry  the  amounts  which  are  marketed  at  points 
along  the  lake  shores.  The  ore  boats  are  not  designed  to  carry 
cargo  of  this  type,  although  occasionally  some  small  consignments 
are  taken  by  them  to  the  Upper  Lake  ports  for  which  they  are 
bound.  The  main  function  of  these  boats  is  to  move  ore  as  rapidly 
as  possible,  and  since  they  could  not  hope  to  get  a  full  cargo  of 
iron  and  steel  in  any  direction,  and  since  small  cargoes  are  not 
profitable,  very  little  of  these  commodities  is  handled  by  them. 

The  United  States  Steel  Corporation  recently  has  begun  to 
ship  some  of  its  products  by  lake.  It  has  built  two  electrically 
propelled  vessels,  of  2100  tons  burden,  to  handle  the  movement 


I  1 6  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [296 

of  some  of  its  own  mill  products  from  ports  on  Lakes  Erie  and 
Michigan.  Those  two  vessels,  the  "Steelvendor"  and  the  "Steel- 
motor,"  represent  a  distinct  departure  from  the  ordinary  bulk 
freighter,  which  is  steam  driven,  and  which  is  of  too  great  size  to 
pass  through  the  Welland  Canal.  The  new  type  of  vessel  is 
designed  to  operate  on  the  Great  Lakes  and  the  St.  Lawrence  in 
summer  and  fall,  and  along  the  Atlantic  and  Gulf  coasts  in  winter. 
They  have  two  loading  lines,  one  for  lake  operations  and  the 
other  for  ocean  work,  the  latter  when  they  operate  in  Atlantic 
and  southern  waters,  carrying  the  products  of  the  Steel  Corporation 
from  New  Orleans  and  Mobile  to  various  other  ports.  In  this  way 
the  boats  can  be  in  operation  all  the  year  round.  All  their  equip- 
ment is  electrically  operated,  and  they  are  provided  with  loading 
and  unloading  machinery  which  makes  dock  equipment  unnecessary. 
They  are  designed  to  carry  structural  steel,  rails,  billets,  plates, 
tin  plate,  and  structural  sections  up  to  sixty-five  feet  in  length.^' 
The  success  of  these  boats  already  has  been  demonstrated,  and 
other  companies  may  follow  the  example  of  the  Steel  Corporation. 

Artificial  Restrictions  to  the  Markets  of  the 
Calumet  District 

Until  the  abolition  of  "Pittsburgh  Plus"  in   1924,  normal 
competitive  conditions  did  not  exist  among  steel  producers  in 
different  parts  of  the  country.    The   advantages  of  its  central 
f        location  near  Chicago,  and  of  cheaper  production  were  not  per- 
I        mitted  to  function  for  the  advantage  of  the  Calumet  District 
t         either  in  Chicago  or  in  the  Northern  Interior.   An  artificial  check 
was  put  both  upon  production  and  distribution.    "The  develop- 
ment of  the  steel  producing  mills  at  Pittsburgh  is  abnormally  in- 
creased because,  under  the  Pittsburgh  plus  system,  the  market 
of  the  Pittsburgh  mills  is  the  entire  United  States.    The  develop- 
ment of  the  steel  producing  mills  outside  of  Pittsburgh  is  restrained 
because  they  are  obliged  to  share  their  markets  with  the  Pitts- 
burgh mills  and  cannot,  without  lowering  their  prices,  invade 
other  markets."" 

Prices  in  Chicago,  with  a  few  exceptions,  were  determined  in 
the  following  way.  If  steel  was  selling  at  Pittsburgh  for  $30  per 
ton,  then  the  Chicago  price  was  $30,  plus  the  prevailing  freight 

"/row  Age^  Jan.  24,  1924,  pp.  289-90. 
"Federal  Trade  Commission,  "Docket  740,  p.  18. 


297]        THE   CALUMET  DISTRICT  IN   RELATION   TO   ITS    MARKETS  II/ 

charge  from  Pittsburgh  to  Chicago,  which  in  1924  was  ?7.6o  per 
ton.  The  Chicago  fabricator  always  paid  this  additional  amount 
whether  the  steel  he  purchased  was  made  in  Pittsburgh  or  in  the 
Calumet  District.  This  gave  the  Calumet  producer  a  higher  profit 
for  his  steel  in  Chicago,  which  offset  lower  profits  obtained  at  points 
east  of  that  center,  and  permitted  him  to  distribute  his  orders 
among  eastern  and  Calumet  plants  to  suit  his  own  convenience. 
As  a  result  production  in  the  Calumet  and  the  Pittsburgh  Districts 
rose  and  fell  simultaneously. 

When  the  "Pittsburgh  Plus"  system  was  instituted  in  1900, 
Pittsburgh  was  the  center  of  cheapest  production.  Under  those 
conditions  the  evils  of  a  base  price  were  not  so  great.  But  circum- 
stances have  changed.  The  Calumet  District  produces  at  lowest 
costs  today,  but  the  system  remained  until  1924  as  it  was.  Con- 
sequently, production  in  all  areas  west  of  Pittsburgh  has  been  made 
subservient  to  that  center.^^ 

Owing  to  the  discriminatory  prices  charged  by  the  steel 
companies  under  this  system,  it  was  possible  for  the  Pittsburgh 
producers  to  compete  in  Chicago  on  terms  of  equality  with  those 
of  the  Calumet  District.  Under  normal  conditions  the  only  prod- 
ucts which  could  enter  this  market  were  those  which  were  not 
produced  locally.  These  comprised  those  "shapes"  which  were 
only  made  at  eastern  mills.  Apart  from  those,  local  production 
was  more  than  ample  for  the  demands  of  Chicago  and  its  vicinity. 
Since  costs  of  production  were  approximately   15  per  cent  less  ^ 

than  in   Pittsburgh,   and   an   additional  $7.60  per   ton   for  rail-  I 

road  freights  was  entailed  before  the  latter  could  put  its  product 
on  the  Chicago  market,  there  seems  to  have  been  no  justification 
for  the  influx  of  steel  which  took  place  from  that  center.  Since 
the  major  producers  in  the  Calumet  District  are  subsidiaries  of 
eastern  corporations,  some  of  the  needs  of  Chicago  were  supplied 
from  eastern  mills,  rather  than  from  local  sources.  This  certainly 
was  true  not  only  when  the  Calumet  mills  were  busy  and  eastern 
plants  slack,  but  also  when  trade  was  slack  everywhere. 

The  Pittsburgh  producer  likewise  shared  the  western  and 
northwestern  markets  on  equal  terms  with  those  of  the  Calumet 
District,  in  spite  of  the  fact  that  the  latter  was  considerably 
nearer  to  these  areas  and  had  a  large  surplus  available  for  dis- 
tribution outside  Chicago.  Thus,  the  purchaser  in  Duluth  paid 
the  Pittsburgh  price,  plus  the  railroad  freight  from  that  center, 

^^Federal  Trade  Commission,  Docket  740. 


I  1 8  IRON  AND  STEEL  INDUSTRY  OF  THE  CALUMET  DISTRICT         [298 

whether  the  steel  was  made  at  Chicago,  Milwaukee,  Pittsburgh, 
or  Duluth  itself. 

Under  the  "Pittsburgh  Plus"  system  everyone  knew  exactly 
what  he  would  get  for  steel  sold  in  the  territory  of  the  competitor, 
since  everyone  sold  on  the  same  basis.  If  any  firm  broke  away 
from  this  national  scheme  the  Calumet  producers  adopted  f.  o.  b, 
mill  prices  in  order  to  protect  themselves.  This  checked  competi- 
tion effectively.  In  1921,  an  eastern  competitor  of  the  Chicago 
mills  in  the  sale  of  plates,  bars,  and  shapes,  started  price  competi- 
tion. The  Calumet  mills  at  once  quoted  f.  o.  b.  Chicago  prices, 
which  were  maintained.  But  since  this  competitor  only  cut 
prices  on  these  particular  commodities,  the  Pittsburgh  prices  were 
retained  on  all  others. ^^  "  'The  Pittsburgh  Plus'  system  causes  a 
greater  tonnage  of  steel  products  to  be  shipped  by  eastern  mills 
into  the  West  than  by  western  mills  into  the  East,  because  of  the 
fact  that  the  market  of  the  Pittsburgh  mills  is  the  entire  country, 
including  the  West,  while  the  western  mills  cannot  go  into  the 
East  without  taking  lower  and  lower  prices  the  farther  east  they 
go."^^  In  order  to  cope  with  this  difficulty  the  Calumet  producer 
was  obliged  either  to  curtail  his  production  or  to  "dump"  his  sur- 
plus into  eastern  areas  or  abroad,  where  the  profits  were  very 
much  less  than  in  Chicago  or  the  Northern  Interior.  The  Illinois 
Steel  Company  was  stated  to  have  sold  as  much  as  50  per  cent  of 
its  production  in  areas  east  of  Chicago.  Almost  all  of  the  other 
producers  were  obliged  to  do  the  same  thing  in  a  greater  or  lesser 
degree.    Yet  their  natural  market  lay  west  rather  than  east.^^ 

If  free  competition  had  existed  the  Calumet  producers  would 
have  lowered  their  prices,  as  they  easily  could  have  afforded  to  do, 
and  would  thereby  have  retained  these  markets  for  their  own 
products.  Instead  of  doing  so,  they  maintained  price  levels  at 
$7.60  above  those  at  Pittsburgh.  Consequently,  the  advantages 
of  location  were  used  to  increase  profits  and  not  to  compete  with 
eastern  producers.  Independent  producers  in  the  district  probably 
benefited  more  than  those  who  were  subsidiaries  of  eastern  com- 
panies. "Chicago  could  sell  most  of  the  products,  if  it  indulged 
in  a  price  competition  with  Pittsburgh,  as  far  east  as  Pittsburgh 
and  still  make  the  same  profit  that  Pittsburgh  would  make.  In 
some  cases,  it  could  upon  a  strictly  price  competitive  basis,  drive 

'•"Federal  Trade  Commission,  Docket  740,  p.  26. 
^''Ibid.,  p.  25. 
^^Ibid.,  p.  25. 


299]       THE  CALUMET  DISTRICT  IN   RELATION   TO   ITS   MARKETS  II9 

Pittsburgh  out  of  all  markets  of  the  country.     .     .     .     Under  free 

competition  Chicago  would  in  the  long  run  become  the  quantity 

production   center   for    the   country   in   competition   with   Pitts- 
burgh."i9 

The  Probable  Extent  of  Markets  with  the  Abolition 
OF  "Pittsburgh  Plus" 

Because  of  the  recent  elimination  of  "Pittsburgh  Plus"  the 
market  of  Calumet  producers  certainly  will  include  presently  all 
of  Illinois  and  the  contiguous  states.  Competition  in  the  West, 
Northwest,  and  Southwest  will  be  easy  to  meet,  since  the  Calumet 
producer  is  nearer  to  these  markets  than  any  eastern  producer. 
If  prices  are  maintained  on  a  par  with  those  at  Pittsburgh,  as  seems 
most  likely,  the  eastern  boundary  to  this  tributary  area  will  extend 
midway  between  Pittsburgh  and  Chicago,  in  keeping  wath  the 
natural  competitive  relations  already  indicated.  If  Calumet 
prices  are  lower,  then  the  producers  there  should  have  no  diffi- 
culty in  extending  their  markets  over  a  still  wider  area,  provided 
production  is  adequate  to  serve  this  extended  market.  At  present 
this  is  impossible,  but  within  a  few  years  the  capacity  of  the  Calu- 
met mills  can  be  so  enlarged  that  there  should  be  no  difficulty  in 
ousting  eastern  producers  from  what  may  be  termed  the  natural 
hinterland  of  the  Calumet  District.  What  influence  the  great  cor- 
porations, who  have  plants  scattered  over  the  country,  will  have  in 
checking  the  full  development  of  the  possibilities  of  the  Calumet 
District  remains  to  be  seen.  The  enormous  expense  entailed  in 
building  a  modern  steel  plant  doubtless  will  be  a  factor  in  the 
situation.  The  obvious  disadvantages  of  tearing  down  established 
plants  and  replacing  them  in  more  suitable  areas,  or  those  attend- 
ing the  total  abandonment  of  mills  in  one  place  and  the  building 
of  new  ones  elsewhere,  are  recognized.  Such  drastic  methods  are 
too  expensive  to  be  adopted  on  a  large  scale.  What  is  more  likely 
to  happen  is  that  new  plants  and  extensions  will  be  built  in  the 
Calumet  District  rather  than  in  Pittsburgh,  in  order  to  tap  the 
western  markets.  It  seems  probable  that  in  the  long  run  the 
Calumet  District  will  become  the  chief  center  for  the  production 
of  iron  and  steel  in  this  country. 

^^Iron  AgCy  May  8,  1924,  p.  1346. 


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1.  Andreas,  A.  T.,  History  of  Chicago.  Chicago,  1884. 

2.  American  Iron  and  Steel  Institute,  Annual  Reports.  New  York. 

3.  American  Iron  and  Steel  Institute,  Utilization  of  Blast  Furnace  Slag  for 

Construction  Purposes.  1923. 

4.  Backert,  a.  O.,  The  A.  B.  C.  of  Iron  and  Steel.   Cleveland,  1919. 

5.  Barneveld,  C.  E.  van.   Iron  Mining  in  Minnesota.     Minnesota     School 

of  Mines,  Bulletin  i,  1912,  University  of  Minnesota. 

6.  Bishop,   J.   L.,   A  History   of  American   Manufactures  from   1608-1860. 

Philadelphia,  1868. 

7.  Bridge,  J.  H.,  The  History  of  the  Carnegie  Steel  Company.   New  York,  1903. 

8.  Butler,  J.  G.,  Fifty  Years  of  Iron  and  Steel.    Cleveland,    1920. 

9.  Chemical  and   Metallurgical   Engineering,    "Basic    Slag    as    a    Phosphate 

Fertilizer."    November  12,  1923. 

10.  Chicago  Times  Company,  Chicago,  iSji-iSgi.    Chicago,  1891. 

11.  Chicago  Tribune,  Statistical  and  Historical  Revieiv  of  Chicago.    Chicago, 

1869. 

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13.  Cleaver,  C,  History  of  Chicago,  /8jj-/Sp2.    Chicago. 

14.  Coal  Age,  1910-1925.  New  York. 

15.  Cope,  G.  W.,  The  Iron  and  Steel  Interests  of  Chicago.    Chicago,  1890. 

16.  Crowell,  B.  and  Murray,  C.  B.,  Iron  Ores  of  Lake  Superior.    Cleveland, 

1923. 

17.  Eckel,  E.  C,  Iron  Ores.   New  York,  1914. 

18.  Federal  Trade  Commission,  Evidence  Submitted  at  the  "Pittsburgh  Plus" 

Enquiry,  Docket  740.    Washington,  D.  C,  1924. 

19.  German  Press  Club  of  Chicago,  Prominent  Citizens  and  Industries  of  Chi- 

cago.    Chicago,  1 901. 

20.  Goodspeed  Publishing  Company,  Industrial  Chicago.     Chicago,  1894. 

21.  Harbison- Walker  Refractories  Company,  A  Study  of  the  Open  Hearth. 

Pittsburgh,  1912. 

22.  Hartshorne,  R.,  The  Lake  Traffic  of  Chicago.  University  of  Chicago,  1924. 

23.  Hayes,  C.  W.,  Iron  Ores  of  U.  S.  A.,  Bulletin  394,  U.  S.  G.  S.  Washington, 

D.  C,  1909. 

24.  HuRD,  R.,  Iron  Ore  Manual.    St.  Paul,  191 1. 

25.  International  Shipmaster  s  Association  Directory,  Great  Lakes  Shipping. 

Chicago. 

26.  Industrial  Conference  Board,  Graphic  Analysis  of  Census  of  Manufacturing 

of  U.  S.,  1 8 49-1 9 1 9.   New  York. 

27.  International  Publishing  Company,  The  City  of  Chicago,  A  Half  Century 

of  Progress,  1837-1887.    Chicago,  1887. 

28.  Iron  and  Coal  Trades  Review,  1910-1924.    New  York. 

*The  above  references  include  only  those  which  have  been  useful  in  con- 
nection with  this  study.  They  comprise  only  a  small  part  of  the  literature 
examined. 

121 


122  BIBLIOGRAPHY  [3O2 

29.  Iron  Age,  1910-1925.    New  York. 

30.  Iron  Trade  Review,  1900-1925,    New  York  and  Cleveland. 

31.  Iron  Trade  Review,  The  Lake  Superior  Iron  Ore  Manual.  New  York,i9i3. 

32.  Keir,  M.,  Manufacturing  Industries  in  America.    New  York,  1920. 
23.  Lake  Carriers  Association,  Annual  Reports,  1910-1925.    Cleveland. 

34.  Leith,  E.  K.,  Economic  Aspects  of  Geology.    New  York,  1921. 

35.  Michigan  Geological  and  Biological  Survey,  Mineral  Resources  oj  Michi- 

gan, No.  21,  Series  17,  191 5,  and  No.  34,  Series  28,  1924. 

36.  National  Federation  of  Iron  and  Steel  Manufacturers,  Statistics  oj  the  Iron 

and  Steel  Industries.   London,  1922. 

37.  Orten,  E.  M.  and  Peppel,  S.  V.,  "Limestone,"  Bulletins  4,  j.  Geological 

Survey  of  Ohio,  igo6, 

38.  Parsons,  F.  W.,  "The  Romance  of  Steel,  "Worlds  Work.    October,  1921. 

39.  Pep  in  Calumet.    Chamber  of  Commerce,  Hammond,  Indiana,  1924-25. 

40.  Plumb E,  G.  E.,  Chicago  the  Great  Industrial  and  Commercial  Center  oJ  the 

Mississippi  Valley.    Chicago  Chamber  of  Commerce,  191 2. 

41.  Popple  WELL,  F.,  Some  Modern   Conditions  and  Recent  Developments  in 

Iron  and  Steel  Production  in  America.    Manchester,  1906. 

42.  Riley,  E.  A.,  The  Developrnent  oj  Chicago  and  Vicinity  as  a  Manujacturing 

Center  Prior  to  1880.    Chicago,  1911. 

43.  Shurick,  a.  T.,  The  Coal  Industry.    Boston,  1924. 

44.  The  Transactions  oj  the  Institute  oj  Mining  and  Metallurgical  Engineers, 

LXII.  New  York. 

45.  U.  S.  Bureau  of  Commerce,  Transportation  by  Water.    1916. 

46.  U.  S.  Census  Reports  oj  Manujactures,  1 880-1 923. 

47.  U.  S.  Corporation  Bureau,  Report  oj  the  Commissioner  on  the  Iron  and  Steel 

Industry,    Part  i,  191 1. 

48.  U.  S.  Army  Engineer  s  Annual  Reports,  1 880-1923. 

49.  U.  S.  Engineer's  Report,  "Chicago  and  Adjacent  Waterways."    1913. 

50.  U.   S.   Engineers,   Survey   oj  the  Northern  and  Western   Lakes.     Bulletin 

No.  31,  Detroit,  1922. 

51.  U.  S.  Geological  Survey,  Mineral  Resources  oj  the  U.  S.  A.,  Annual  Reports. 

52.  U.  S.  House  Documents: 

No.  234,  63rd  Congress,  First  Session  (1913). 
No.  237,  63rd  Congress,  First  Session  (1913). 


303] 


ILLUSTRATIONS 


12- 


Plate    i. — Mining   Operations   at   Hibbing,   Minnesota,   on   the   Mesaba   Range. 

Courtesy    of   the    Penton    Publishing    Company,    Cleveland. 


Plate  2. — A  modern  Lake  Freighter  alongside  the  Ore  Dock  at  Escanaba. 
The  hatches  of  the  boat  are  spaced  the  same  distance  apart  as  are  the  spouts 
to  faciHtate   loading  operations.  Courtesy  of  the  Escanaba  Chamber  of  Commerce. 


ILLUSTRATIONS 


125 


Plate  3. — A  section  of  the  Ore  Docks  at  Duluth  showing  loading  operations 
in  progress,  the  dock  structure,  and  the  loading  spouts. 

Courtesy    oj   the   Illinois    Steel    Company. 


Plate  4. — The  mouth  of  the  Calumet  River  showing  the  ore  docks  of  the 
Iroquois  plant  on  the  right  and  part  of  the  Illinois  Steel  Plant  on  the  left.  The 
Elgin,  Joliet  and  Eastern  railroad  crosses  the  river  by  the  bridge  in  the  foreground. 


307] 


ILLUSTRATION; 


127 


Plate  5. — The  artificial  "slip"'  harbor  at  Gary,  the  ore  docks,  a  vessel  being 
unloaded,  and  part  of  the  blast  furnace  plant  operated  by  the  Indiana  Steel 
Company.  Courtesy  of  the   Wellman-Seaver-Morgan  Co.,  Cleveland. 


Plate  6. — A  5-ion  Clam  Shell  in  the  hold  of  a  Lake  Freighter.   The  picture 
indicates  the  construction  of  the  boats  to  facilitate  rapid,  unimpeded  unloading. 

Courtesy  of  the  Illinois  Steel  Company. 


309] 


ILLUSTRATIONS 


129 


Plate  7. — A  close  view  of  the  latest  type  of  electrically  operated  unloading 
machinery  at  Gary.  The  deck  construction  of  the  boat  facilitates  the  operation 
of  all  the  equipment  at  the  same  time. 

Courtesy   oi  the   ]V ellmanSeaver-Mor gan   Co.,   Cleveland. 


Pl.\te  8. — Coal  mining  operations  at  Christopher,  eastern  Kentucky.  '1  he 
conveyor,  tipple,  and  the  hillside  location  of  the  drift  are  typical  of  the  opera- 
tions in  the  Kentucky  mountain  districts. 

Courtesy  oj  the  Columbus  Mining   Company. 


311] 


ILLUSTRATIONS 


ni 


Plate  9. — The  L.  S.  "Har\-ester"  at  the  Coal  Dock  of  the  Wisconsin  Steel 
Company.    Tlie  same  type  of  boat  is  used  to  move  coal,  ore,  and  limestone. 


Pl.\te  id. — A  Limestone  Quarry  at  Alpena,  Michigan.  The  picture  shows 
the  various  levels  at  which  the  stone  Is  being  quarried,  and  the  series  of  railroad 
tracks  by  which  it  is  assembled  at  the  crusher.  The  thin  overburden,  about 
four  feet  thick  at  this  point,  can  be  seen  clearly  at  the  left  of  the  picture. 

Photograph  by  G.   W.  Hance,  Detroit. 


ILLUSTRATIONS 


Plate    ii. — The  Ore  Piles,   Bridge   Conveyors,   and   Blast   Furnaces   of   the 
Iroquois  Plant,  South  Chicago. 


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